Over the years lots of things can have happened, someone can have borrowed the machine, there's usually more than one person in a household sewing (or used to be at least). No doubt a rogue sewing service has happened now and then, but luckily it doesn't seem to be the most common. What's very common is most sewing machine service shops will not bother about old machines if they cannot order parts from their regular suppliers. I can imagine an older sewing machine repair guy keeping up a small business in his house, and they are often very good at their job.
Most rough treatment happens after a machine is no longer new or modern, as the years go by the regard for it dwindles. I guess it was looked upon as old and obsolete by the late 1960s, at least by some. Half hearted repairs is quite common though and few actually hand their machines in for service on a regular basis. Machines can get rough treatment during storage, or when the owner moves to a new house. Sewing machines can get a hard life that way regardless of their capabilities.
I would still assume it's the correct screw in there until it's obvious that it's not. I would not start drilling until I had the replacement screw in my hand either. If that's the case at the moment switch to a different oil and soak the screw once more. I like to have as close to original parts as possible and screws have to be the corret ones. If you can have the threading measured there are speciality stores that either have the the type of screw you need, or they can make or alter one to your requirements. They usually don't have chrome plated screws, but sometiems they have stainless steel which is reasonably close.