Repair the hole with west system and fibers - it will be plenty strong. Get rid of the set screw. To stop the forward slop between the rudder blade and the casting, put some epoxy putty (the green roll stuff from home depot works fine) in the casting. Tape some saran wrap over the rudder blade and swing it down into the casting at the desired rake and let the putty set. The saran wrap stops the putty sticking to the rudder.

This is how we fix up our Tiger rudders (which use very similar castings). You could also glue in bits of neoprene for a similar effect but bedding with epoxy has worked well for us.

Chris.