Heck, a 3/16 hole - I would just drill and tap it out for a 1/4 or 5/16 NC bolt, slobber the bolt and a flat washer with J-B weld and bolt it in place. The pipe plug fix will work as well but many folks just don't have those taps. Either way will hold just fine. Unfortunately there will probably be more rust holes coming.
I would probably start looking for another 360-390 engine as well, preferably a 390 as they are s-o-o-o-o much better.