I think the hole you are talking about is called the 'weep hole' and its' function is to allow coolant to weep out when the seals are going bad. This way you see something dripping from your car, check it out and discover your water pump is needing replacement.

A lot of American cars from that era had the weep hole on the bottom of the pump. This made it difficult to tell just where the coolant was leaking from. Mercedes just went one step better on even this tiny item.