Hi Ron,
Banjo fitting has gaskets on both the bolt and the pan side and could well be a leaker with one or the other missing. In fact Page LU-13 our BGB, indicates these gaskets are NOT reusable. The Torque figure for this union bolt is only 18ft/lbs so be careful not to overtighten this puppy.
Fuel injection rated hoses are a good choice, they provide a longer use life. Smart choice.
The water cooled oil feature is definately recommended for mid-engined cars which do not get much air cooling effects. Relying on just the radiator is "risky business", if your radiator boils over, you buy a new engine?. In fact, the oil filter bracket has fittings for additional oil coolers such as air-to-oil if you comtemplate dumping the water cooler, but personally I would not.
Your oil "leakage" could possibly be from the "O" ring oil seal at the base of the distributor, if the oil is also inside the dist cap it's the dist seals. The oil pressure sensor screws into the block under the dist cap, but it doesn't have a reputation to leak as do the others.
As for the banjo and union bolt replacement, yes, proceed. The oil pan has a receiver bolt flange welded to the interior of the pan soas to offer a solid base for the banjo to be attached to.
BTW the water pump has a "O" between it and the block too, with 330k miles this may be your next maint item.
(Has this engine been reconditioned?)
mr2tim