I had this thought also after thinking about the problem for a few days. Why wouldn't threading the hole and installing an allen head screw cure the problem? If there is room in the water jacket then the screw could even have a head on it. A star washer and some red silicone under the head and it wouldn't turn out.
Just make sure that there is nothing protruding into the cylinder wall!
I've been following this thread with interest since it started, and hope for a good outcome.
These comments about an allen head setscrew remind me of a fix my Dad did on his company truck (that's the kind of guy he was...he just got stuff done). Anyway, it was a Chevy Stovebolt 6 cylinder that developed a crack between two cylinders. It was solid metal between them with a water jacket just below the block deck...he drilled and tapped for a #10 machine screw, installed it then trimmed it & filed it flush with a fine file, then drilled a second hole so the next screw bit just a little into the first one. I think there were 3 screws total to bridge the crack. It held just fine for the rest of the time he had the truck.
I believe he used some sort of gasket sealant, this was close to 50 years ago and they have much better stuff out there now...if this hole is below the piston skirt or at least below the oil ring, it will be much more thermally stable than Dad's repair between those two combustion chambers. It should be not much hotter than 212 degrees, right?
Carefully measure the depth of the hole--you might be able to get a depth micrometer to bridge the surface of where the the core plug was, zero it out against the side of the cylinder then determine how far it is to the piston.
Use the finest thread/smallest diameter stainless steel capscrew you can find (socket head would be great), trim to just under the wall thickness, this way you have a head that will prevent the screw from going too deep. Red Loctite 272 is your friend here. It's good to 450 degrees.
It could be a stopgap, or it may last much longer, but you don't have much to lose at this point and at least could buy time if you had to save up for a new engine block.