The hole you see underneath, your #1, is just the far end of the stove for the automatic choke. It's just a piece of steel tube swedged into the manifold so the automatic choke unit can draw heated air as the engine warms up. If in fact you feel exhaust coming out of it, then the tube has corroded away inside. Relatively easy fix, but when you swedge the ends of the new piece of steel tube, remember how brittle the cast iron is!!
Re the choke, remember that the tube in the manifold is sealed at both ends at its outside diameter to keep the exhaust gases within the manifold, yet is open at both ends at the inside diameter.
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