The hole in the frame above the dropout is for mounting a rack or fenders. The big slot in the derailleur's mounting plate will end up matching the frame's dropout and your rear axle will go through both. Derailleur should end up hanging almost straight downward. When you insert the rear wheel, the right side of the axle will butt up against the derailleur mounting plate, and the left side will be in the middle of the dropout. You just hold the wheel so it's centered (check the rim at the chainstays) and tighten the axle. Sometimes a pain to center the wheel because there is nothing to hold the left side in position.