Okay thanks for the info! My only concern is will it cause any problems having the "breather" hose connected to that? I mean.. What is the breather hose used for? Is it bad for oil to go up there?
That's how the stock oil tank is configured -- two main in/out hoses, and one breather connection to that nipple on the lower rear crankcase.
There is a second breather on top of the engine, in the valve cover, which (on the 78s) connects to a separator that hangs below the battery box. It separates the output into liquid and gas, sending the liquid to a filter and then the street, and the gas back into the airbox.
But the lower breather connector you've been asking about just goes to the oil tank. These breather connections and hoses are there to deal with the expanding gases and occasional small quantities of overflow that occur due to heat and other operating conditions.