The bolt and nut go through the derailleur, but not through the screw hole in the frame. That shaped piece that the bolt screws into fits into the dropout itself, the same slot that your rear wheel axle fits into. It fills the space in the rear of the dropout slot, and your axle fits up against that. See how the shape of that piece is recessed to fit the dropout on 3 sides, and the axle on the 4th side? This is the way all rear derailleurs were mounted before derailleur hangers were built into the frame.
Oil is good, grease is better.
2007 Peter Mooney w/S&S couplers/Terry Butterfly
1993 Bridgestone MB-3/Avocet O2 Air 40W
1980 Columbus Frame with 1970 Campy parts
1954 Raleigh 3-speed/Brooks B72