That is a typical crack commonly found on these engines. Since it so low on the block, it has no impact on the cylinders or anything else except a slow coolant leak. Make sure to have all of the crud cleaned out of the bottom of the water jacket.The bottom of the water jacket is rel close to where that crack is. I had a 216 crack like that after the thermostat failed to open on a hot day. the water jacket was full of crud. I had it welded, but it just resulted in more, smaller cracks going vertical. I ended up cleaning out the water jacket and Marine Texed it. I ran it for 40,000 miles like that. It still ran like a fine clock when I retired it to upgrade to a 350 and spent 20,000 to making it a show stopper and sold it for $55,000.
I'd have the machine shop finish the machine work and ask him not to paint it so that you can patch it up with Marine Tex as Hotrod describes.
