To correct Phil's typo NO lubricant is needed for tapping cast iron.
Looks like you have access to the back side as well so stick a magnet just below the hole while you're tapping to catch the chips. Getting it perpendicular to the surface isn't even a big deal if you're just plugging the hole, and a cast iron plug would be best to match the expansion/contraction of the base material. If you grind it off flush it would even be mostly invisible once the block is painted. Use some pipe dope or some Permatex #2 on the plug when threading it in and just get it snug.
