Helicoil for transmission bolt

If it's in the open with "Elbow room" to operate, there is an alternative to heli-coils.
They are called Keencerts. Like keyed insert, but thicker and stronger.
Drill it out per their chart.
Thread in the insert till it's flush,
then use the pilot tool to drive 4 keys in to lock.
I had used them on repairing hot forging machines and offset litho printing presses.
Either tons of pressure, or millions of cycles, and they perform flawlessly.

I just noticed you mentioned "Leaking."
Neither of the thread repair items, Heli-coil or Keencerts, is liquid tight.
You may be on the right track with the next larger diameter bolt for that.
Put thread sealant on the threads.

One more thing, If you have to drill out the wiring connector for clearance,
you might want to sandwich it between two 1/8" aluminum plates,
clamped together w/ vice grips, so the drill bit doesn't catch on the connector
and wrap wiring all up on the drill and make a mess for you.
Put pilot holes in first, a little smaller, to guide drill, and let it drill easier.

 

I didn’t read where there was an oil leak. If it’s the large pto hole you are using at bottom of trans, the only through bolt holes are the 2 bolt holes at the front toward the bellhosusing. Even with helicoils, just apply some red rev to the threads of the bolts. It will ooze into the channels and seal this 2 bolts from any leaks. The rest of the bolts are not through bolts.

 

I would not tap bigger unless I made sure a bigger bolt would work with the pto, in case you decide to put it back on, sometimes there is not much clearance for the bolt head.
If you have to use a helicoil, it will hold forever.

 

Glad you clarified "Leak," I was wondering.
Most cast aluminum items like that are cast as an undersize blind hole, and drilled and tapped.
I have seen places where the thru hole went into engine, on the front cover bolt holes;
a really sucky design - necessitated by the cramped confines of the engine compartment.
I used to use thread locker as sealant, and also squash a small O Ring under the head of the bolt.
Half of it went into the hole, and half was obliterated into a flat rubber washer.

One more tip; if anyone is ever drilling out items, and the next size is close to existing hole size,
you will find your drill bit wants to catch, and dig in, especially true drilling plexi-glass, also.
Take the drill bit and do a grinding operation on it called "Lipping the drill."
Usually you grind a drill bit on backside of flutes to sharpen by increasing clearance.

This is done on cutting edge, only .010" or .020" of a flat. just barely touch it to grinding wheel.
It makes cutting edge flat.
Look at a masonry drill point as an example; it's flat, but it still cuts.
You can easily grind this tiny flat away, if this drill bit is from a good set you want to keep.
(May be examples on inter-webs; try Googling it?)