Good news nat. That slight circular machining is where the o-ring sits on the earlier engines. Blocking off the oil way in the cylinder casting is an easy fix!!!!
The hole in the crankcase could still be open to an oil way though, so as it's not needed, i'd make sure there's "enough" sealant around there to make sure no oil gets out
The Loctite sounds like it'll do the trick............RTV is the key. I use Threebond (Ducati use it in production).
It just doesn't need to go hard/brittle over time............
Best of luck finishing the job off
