That is a bump stop to stop your spare from crushing your tailight. It should have a little rubber bumper where that hole is, and should not be bent to hell. Is a good thing to straiten out and mount a CB antenna to.
Complete rebuild axle/engine/everything swap in progress: Building stock width 44's with 302 from 01 Explorer. Motor has GT40p heads, Cobra Intake, and truck cam. Running A9L EEC IV stand alone engine from late 80's-90's Mustang GT. Big Bearing NP435 married to NP205.