What's circled in the picture is the factory oil idiot light switch on a stock GVR-4 oil filter housing. It's what switches the low oil pressure light on the dash when engine oil pressure drops below 4 psi or so. The oil filter housings that come on 91-94 DSM's are almost identical, except that they have an extra port available to mount a oil pressure sending unit in addition to the low oil pressure switch.
The thread pitch on most aftermarket oil pressure sending units is 1/8 NPT, while the factory hole is threaded for something very similar, but not exactly 1/8 NPT. You can screw the sending unit in and force it in until it stops leaking, but I would not recommend it. I've ran a 1/8 NPT tap into the sensor hole on the oil filter housing with it on the engine, but I also wouldn't recommend doing that. If I were going to do it the "right" way, I'd pull the oil filter housing off the engine, tap the hole for the right thread pitch, and re install after carefully cleaning out any debris that might have been created while tapping the thread. The hole is a pipe fitting, so it's going to get tighter as you thread the sensor into the hole, however don't get too crazy as you can crack the housing.