Willy,
I do not think you have a spread bore manifold, that would look like the photo posted.
Yours is a square bore manifold intended to accept a factory installed Autolite or Motorcraft carburetor on an Exhaust Gas Recirculation plate.
The groove you ask about has holes at each end that connect to the exhaust gas crossover passage in the bottom of the manifold.
The exhaust gas crossover passage does two things, first it allows hot exhaust gases to pass underneath the manifold intake ports to warm the manifold and help the fuel vaporize for easier driving when cold. The passage also lets exhaust gases into the groove and into the EGR plate. When the EGR plate valve opens, it lets a little exhaust gas into the intake side to lower tailpipe emissions. That feature is not required or desired for your application.
To use that manifold with your Holley I think you need to do two things:
1. you should have your machinist tap and plug the holes at each end of the groove. That will keep hot exhaust gases away from beneath your carburetor which will burn your carburetor gasket.
2. you will need a four hole carburetor spacer beneath your carburetor. This will cover the groove in the manifold and insulate the carburetor from heat from the crossover passage. I do not think a open spacer will work because it will not completely cover the groove in the manifold.
You should not have to increase the bores on your manifold to get your carburetor to work properly. You may, but it is not required.
Good luck.