OIL LEAK

There is no seal, just a close fitting bush. To get to it, the chain and sprocket has to come off, use of a three legged puller here to do that, making sure you don't lose the tiny woodruff key when the sprocket comes off. The timing cover can then be removed, make sure you don't lose the sprung loaded brass quill that feeds oil to the crank. 
If you don't want to go that far and the amount of oil leaking is negligible but annoying, just fit the mag chain case with a gasket and sealant so the oil goes down the chaincase breather pipe to a suitable catch bottle. 

...and you won't be able to remove the bottom sprocket with the magneto chain in place - so you'll need to be prepared to re-set timing.  It will never be as oil tight as a new modern design because they didn't have synthetic rubber garter type oil seals when it was designed.  And the magneto chain likes a bit of oil...
 

The bronze bush behind the lower sprocket has a machined scroll, which doesn't extend to the outside of the bush.  The scroll effectively screws the oil back into the engine, but as things wear more oil escapes to the mag chain casing and causes some leakage when the level builds up to the "overflow" pipe.
I asked an expert machinist (my brother) if he could replicate the scroll in a new bush.  Unfortunately it is technically complicated to re-create the coarse scroll unless you're in the bearing manufacturing industry, especially when it has to stop short at the outer end.
I resorted to making a small catch bottle to stop the bike marking its territory!

Phil, I thought the scroll assisted oil feed into the blind end of the bush to keep the shaft lubricated. The rest I agree with....

I keep mine greased which blocks the drain hole. Very little oil seeps through, and I run a felt behind the mag in case it over lubes. May be lucky but I get little issue from the pipe. 

... easy enough to machine a scroll inside a bush by using an internal screw cutting tool and setting the feed to be very coarse - say 4 TPI - by using appropriate change wheels. Then either rotate the chuck by hand or under power if you have quick reactions! 

If you drill a hole into the crankcase to drain the oil it will also allow crankcase pressure to escape into the mag chain case, which will make the situation worse.
Some years ago I saw an article where the chain was converted to a belt drive.  This allowed an oil seal to be fitted to the camshaft spindle so that no oil escaped into the mag chain case.

I would encourage your engineering instincts to prevail and carry out your lower hole drilling in the cases.
What have you got to lose? If it works the jobs a good un, if not you can always plug it up and rethink what you want to do next if anything.
Tip. Use a drill size that will accommodate your taps and dies collection.