One way to think about it is that a lathe normally has only one or two power feed speeds, so perhaps you don't need the range that you'd like on a mill. Perhaps start with the normal max speed on the lathe auto-act, bear in mind that the slowest one is too fast for some things, so go from perhaps 1/3 of the slowest to 2x the fastest, and you should have something a lot more versatile than the mechanical feed.
That speed controller only gives a 10:1 range of PWM ratios so may be a bit limited depending on the above calculation.
The motor looks a bit tiddley to me, I'd go for something beefier. Also I think 2A is light for the PSU – just been reading Mike Stratton's article on power drawbar in the latest MEW, he got a 25 amp 12 V PSU for £17 off eBay. It's always useful to have lots of amps round the workshop.
Final point, some speed controllers don't like having their outputs open circuited when you throw a reversing switch when the motor is running, a centre-off switch might be useful so the motor can stop before the reverse volts are applied.
Edited By John Haine on 09/03/2016 17:23:24