my experience is that cutting the flange may make the problem worse, not better. Some put a gusset between three and five to add more strength. I'm not sure that helps either Probably does not hurt is about the best I could say LOL The tubes are old and thin and that adds to the problem.
A good welding solution that uses tig and floods the inside of the pipe with gas to make the repair as clean as possible is probably the best solution and make sure the entire area is heated up so the cooling off is over a larger area rather than stressing along the weld helps.
the most effective solution is to replace the header in question...wel l, not effective in the cost for sure. smh. The Chinese imports are cheap, fragile, thin, and may not fit. Not much of an option at all from all the reviews I have read.
My first thought on the O2 bung is to heli-coil it if the correct threaded insert is available. There is no reason you cannot add another bung, tho. Just make sure it is in a place that the wire to it will not get burned. I would keep it as close to the turbo as possible but a little lower should not hurt. It needs enuf room to allow all six cylinders to be mixed so you get an average reading.
As long as it does not leak, it should not hurt to have a 1/16" of clearance between the base and the bung, imol.