They use those holes to remove the core sand after the metal cools....
If they can't get all of the core sand out of the casting or some of it gets 'burned into" the walls, then it may cause hot spots in the areas where it's restricted.... Those holes allow the foundry to remove the sand out of the jackets (shaking and poking at it) so it doesn't hurt cooling ability... The inner cores are used to shape the inside of the casting (water jacket and cylinders)...
At the foundry they have a huge conveyor that moves the blocks and shakes them to loosen the core sand. This is after they remove the core boxes that shape the outside of the block. They get thrown on the conveyor/shaker and transferred to the core sand removal area where someone takes one and pokes in the jackets to help loosen any sand that won't come out by shaking... (that shaker can loosen the fillings in your teeth...)
Then they get machined to accept the cup plug so the water jacket is sealed....
