It's not designed to be tight, otherwise the lever wouldn't move. It purpose is to stop the gear lever twisting in its ball pivot.

Yes, it should be a grub screw, I think.

Hello chums, in an attempt to locate the source of a rattling gearstick I’ve discovered that this little screw on the side of the turret connecting to the lever is loose and won’t screw in tight. Am I right in thinking this is the lever locating...

Excellent, really useful. Need some of these.