Small plugs - usually made from bronze or brass - were common under set screws. The idea is that they don't rotate when the set screw gets tightened and there for don't (or lessen) the marking of whatever they hold tight. Clean them, dab some grease or antiseize on and put them back with the shorter set screws.
Filling no longer required holes (threaded or not) with filler/putty/epoxy is normal restoration or even maintenance technique. What else would you do? Put in a metal plug then cover it with primer and paint? I don't see the point. Leaving them open makes them swarf catchers.
Lastly, were the hole next to the casting appears to be a deliberate rectangular opening or a casting 'fault'. Your options are very limited to shutting that. I would not even consider brazing or welding it in the position that it's in. You would almost certainly distort the knee way. My solution would be to srew on a solid cover plate behind it to regain whatever rigidity might be lost by the casting hole (since you can get at the back, fix the plate with blind threaded holes to leave no new holes in the front. Fill whatever annoys you in the fault with JB weld or better from the front.
You own it, it is a very nice mill, you are the envy of hundreds if not thousands of people for finding it - and the warranty has run out (if you find the manufacturer)
Make it straight and accurate and then make it pretty.
If you are using a DC motor which may be shorter than the motor fitted on that unfortunate looking 'extension foot', you may be able to arrange it with pulleys both ends and put half of it in the base of the body and have the other end out for the 'direct drive'/high speed pulley - which doesn't look original to me and may well be redundant with the DC motor anyway.
Red isn't a bad colour as such for machines. Why this looks 'amateurish' is that EVERTHING was painted red. If the handwheels and handle had their rims polished, ist would look VERY different. If you paint it grey, see if you can introduce a secondary colour for say handwheels, inside the T-slots, bearing housings - that sort of thing, red, silver, black even... and polish some highlights (maybe even get them nickel plated to prevent rust).
What makes machines REALLY good looking is to cover all flat surfaces in putty and sand them REALLY flat and smooth. Think Deckel, Monarch et al. Have a look how they are finished. You should see undistorted reflections on the surfaces.
It will look brilliant!
The other thing I would do is make a hinged (at the top) cover for the reduction 'gear' belts box. Make it look 'factory option'. You may need to file or fill the opening's top edge a bit, maybe give it a very slight epoxy out-turned flange that looks like 'cast'. That way the cover will sit on something flat. Dopping a tool in there while it's running will not be pretty.
What a bloody great find! Congratulations! I know I'd LOVE it.....
Looking forward to following your resto thread.
Cheers,
Joe