Traditionally, different components of a system are integrated through Printed Circuit Boards (PCB). The long traces on PCB have severe power loss and limit the bandwidth of the interconnects between the components. Advanced packaging offers high-bandwidth, low power, and high-performance inter-die communications with compact sizes and dense pin arrays. 2.5D integration further provides better thermal dissipation, lower cost, and higher yield compared to 3D stacking. Novel CAD tool flows dedicated to 2.5D chiplet designs are essential to enable flexible and efficient 2.5D system designs. In this paper, we present our design, optimization, and analysis methodologies and a design case study implementing an ARM Cortex-M0 microcontroller system using a holistic 2.5D tool flow. We use TSMC 65nm as our chiplet implementation technology with a modified metal stack referring to 2.5D Fan-Out Wafer-Level Packaging (FOWLP) solutions. We also discuss design techniques for chiplet reuse and the Drop-in design approach to develop low-power, low-cost, and high-performance flavors of a 2.5D system. We compare the 2.5D system with its 2D counterpart to validate the holistic design flow.