Yup, that's the hydraulic oil fill. I forget what the manual calls for but since I replaced my pump with a rebuilt and added new hoses, ect. I've used a modern hydraulic fluid (32 weight I think) with no problems.
A word of caution: these old WD style tractors can leak badly from the front hydraulic reservoir seal which lets oil into the engine clutch area. If you're going to fill your hydraulics full, open the clutch inspection plate and place a bucket under it. I've even added extra washers between the clutch cover and clutch housing to allow the oil to drain until I get around to rebuilding the engine (which will let me to get to that *^%@#$ seal). I've christened the bucket "Valdez III" for the number of times I've forgotten to remove it before driving the tractor off (yes, it leaks that much).