Holes in guns can be done a lot of ways. Simplest is the screw in type, either flush or with a shoulder(Brownells). More original looking seems to be a pinged plugged affair or welding.
Rear toggles can be had if you wanted to replace the one that is on the Luger now. Not too sure about trade off in welding/finishing up versus another toggle dollar wise; but the options are out there.
The two screw holes for a custom rear sight on your particular toggle take all the shear forces straight up. Lots of this type come off the toggle. The toggle not only has the backwards force but also another vertical component which is hard on mounted non original sights. Tough environment to be sure, but has been done with irons anyway, most have a shallow recess(or some variation) to take the backward movements, and the screws hold down.
The arty barrel has some advantage in some ways, perhaps with a smallish red dot optic. The movement is back, does not have too much vertical like the toggle. Lots of speed event pistols today have optics with a recess machined to the slide and two screws holding the sight to the slide, ie Romeo1 by SIG. Good red dots cost money due to their reliability touted in difficult environments.
I suspect the stoppage midway thru a mag is due to hold open bounce usually due to inadequate leaf spring tension. If you consider changing the spring, you might read a bit here on the forum before attempting.
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