that is the bottom portion of the cable. The end is probably sealed with sillicone to prevent it from squirting oil. Some what of a common 'fix' when the cables get mangled.
This is in fact a vent, make sure is is not clogged with paint or crap, and aim it down if you can. If you expect to be fording in water, attach a section of hose looped up a little, then down lower than the bottom of the vent pipe.
This is the modulator, it controls when the tranny will upshift. With no vacume line hooked up, it won't upshift untill about 5500 RPM or so, onless you shift it manually. It is supposed to be hooked to manifold vac, however, if you go with no kick down cable, I recomend hooking it to a ported fitting. You can also stick a small screw driver in about 75% of them and fine tune your shift point. Screwing it in will raise the shifting point, and again, with no cable, I recomend screwing it in a bit, but nothing crazy.