That Starret type of indicator design is very old fashioned now that the Mitsutoyo and other dial indicator makes with the rectangular long body shape having 2 dovetails for mounting and the longer slimmer indicator tip, are on the market.
The Starret type came onto the market many years ago, but due to the short stubby indicator tip is not so highly desirable now, it fulfilled a need to replace the large bulky older type of dial indicator for clocking on the mills etc in awkward small bores.
I had the John Bull boxed indicator set and it came with a right angle attachment with a long leg to get into bores and recesses, but was very bulky.
I now have a Mercer dial indicator, same type of tool with the square body, slightly different end, better clocking ability with it's longer sensitive tip, but I would not consider this to be the way to do the job by inserting it into the bore for 2"......BTDT......the bung is as accurate as the hole in the 4 jaw, and once set in will not require resetting.
The bore is 6" long.........the Starret dial indicator max reach is ? long......the best you can get into the bore and still see the clock dial is approx 2".....this may be "good enough" for most people, but I went to a different school.
The bung method requires only a few taps with a soft hammer to get the 1.75" diam bore true.
I could name possibly 1/2 a dozen methods that would work too, some more accurate but more time consuming than the rest, but essay writing is a bore.
The very very simplest way is to use two faces at 90 deg on the outside of the block as your datum faces and set the block in two planes true to the long axis.
You won't have to worry if the 1.75" hole is out once it is running true at the end......the other end is automatically true if you've set the faces of the block square in two planes to the longtitudenal axis in the first place.
The point is, if'n you start off right you end up right without a lot of drama.
As Christopher balks at the bung....LOL, I would suggest then that in the first instance the block be set central in the 4 jaw, but with two faces (90 deg to each other) set true to the long axis of the bed.......this is as simple as you can get and is a simple clock/Saddle wracking exercise, running the clock with the saddle along the block faces untill both are true.......then adjusting the jaws slightly to get the centre location right....it doesn't even have to be in the centre of the block and could be to one side of centre......the result is still the same.....the bore will be true to the block.
When you come to do the second bore, provided you clock the faces true by the same saddle wracking/clock method the bore will be once again in line, and an adjustment for the 1.75" hole to centralise it is kiddies stuff.
I think we ought to see a sketch of the design for the block, some alarming design aspects are coming to light.
Ian.