I'm trying to make a keyfob with a keyhole but the cylinder isn't interacting.
I am not sure of what you mean by "not interacting". Looking at your screenshot, the boolean modifier should work as is. But you didn't set it up to be able to see the result.
To see the resulting mesh in Object Mode:
You need to either hide the Cylinder object by selecting it in Object mode and pressing H, or set it to wire display via the Properties Editor > Object data tab > Viewport Display > Enable Wireframe display:
To see the resulting mesh in Edit Mode:
Enable the Edit Mode display of the Boolean Modifier by clicking this button:
To edit the resulting mesh in Edit Mode:
You need to Apply the modifier. ↹ Tab into Object Mode, hover the modifier with your mouse and hit ⎈ CtrlA, or use the drop down menu:
If the boolean doesn't seem to work at all:
It can happen when using the "Exact" Solver on a mesh that doesn't have the right topology. Two solutions: