Hi, yes, a nick that you can feel should be delt with. You can use crocus cloth or garnet sand paper (check at hardware store) to get rid of it. If the thread on the spool is coming off and either puddling around the bottom of the spool or causing a loop to form I would try using a spool net.
Looks like this:
http://www.amazon.com/Threadsrus-Thr.../dp/B001U5A0Y0
I use the stuff that encases garlic cloves from Sam's Club. You can also ask at your local florist. Large flowers often come from the supplier encased with a net that is discarded.
Also, there is a manual on the Singer site for a 96-80. It looks very much like your picture. If you scroll down to page 11 there are threading instructions. The thread path thru the 3 hole guide is unique. I've never seen it done this way (in and out, rather than a spiral)
http://parts.singerco.com/IPinstManuals/96-80_100.pdf