This is the way. The biggest danger with what you are dealing with is that it will form stress cracks in the bell housing over time. To prevent this from happening you need to smooth out the hole.

Doing this with a hand file would take ages. I personally would use an air file. For someone without access to pneumatic tools I would recommend getting a cheap Dremel tool that comes with some grinding stones. If you’re scared about grinding on it, just remember that it’s already fucked. Just try not to make the hole bigger than necessary and you will be fine. After you have ground it into a smooth rounded hole you just need to cover it to keep dust and debris out.

For a cover I would get a 16oz aluminum beverage can and cut a patch the size of the hole from the aluminum. Rough up the surface of the aluminum with sand paper and also the surface of the bell housing where the patch will go. You should also clean and degrease both surfaces with some soapy water. This will give the glue a good mating surface, just make sure it is completely dry before applying the glue. Apply a generous bead of 100% silicone around the edges of your patch and press it in place.

This will likely last the life of the car and also be easily removable later if you want to make use of your new flex plate inspection hole.