Attempting my first build 72 K5

[sockalaminski]

Yes, that is the correct tool.
The threaded piece is the upper ball joint tapered hole. You will probably need to remove the old one. It takes a spanner socket available at your local napa for about $20. After you install the ball joints and remount the knuckle in the inner C, you will need to torque that to 50 lbs before you put the upper ball joint nut on.

You're doing a great job on refurbishing those parts. Wish I had that kind of energy right now.