The wire is a grounding jumper between the rubber mounted (electrically isolated) handle and the engine chassis, to complete the kill switch circuit. As said above, one of the screws holding the coil in place would be a point to land it, make sure to route it so it doesn't chafe on the ignition lead.
That hole on top of the case is for one of the top cover screws.
....and as also implied, much neater replacement double eyelet Stihl ground wire is available.