Ditto on the posts above. You don't want to block it off (unless you do the wet mod) because if you do, water can't get out and it will rust more inside.
I did the wet mod as the others suggested. Seal up that hole. Take the Bendix cover off, and put 2 oz. of 5W fork oil into the stator cavity. Then for a vent or breather at the top I was able to take a barbed plastic drip irrigation fitting and push it through the rubber grommet where the wires go through (see your second picture), and then added a hose that vents up under the tank.
The common way to do it (as others mentioned above) is to drill a hole in the top of the stator cover and tap threads that will allow a small fitting or grease nipple (as F5 said) to be screwed in, to which a vent tube can be attached.
fyi on another venting idea,
Jeff