From what I've read and believe is that the best screwdrivers for these vintage machines would be the correct size of hollow ground screwdrivers.
I can't tell if the silver collar is separate from the hand wheel or not. It almost appears that it would be. I would put some oil (Tri-Flow) in the hole on the machine by the screw and if there is a separation between the silver part and hand wheel. Let set overnight, try again with a better screwdriver, so it doesn't tear it up any more. If you can clean out the slot with a toothpick or skewer or something like that, it would probably help.
Janey - Neat people never make the exciting discoveries I do.