The 261's have "siamesed" cylinders, with no passage for coolant between them. The large bore makes that casting process necessary. The steam holes allow coolant to pass close to the cylinder walls on its way from the block to the head, eliminating hot spots where the cylinders meet. The small block Chevy 400 V-8 uses the same type of holes in the head, for the same reason- - -big bore and siamesed cylinder walls.
Jerry