That 68 probably had a metal oil line from the timing cover originally. My 69 did and the 69 Spares book shows the metal line. So already it's not original. I doubt if those metal lines are available any more, they crack and leak, just like mine did. Get some Nylon 11 or air brake hose and replace them. That was also the factory fix. Yes, the top one should go over the headsteady. There's a few articles on replacing those plastic lines on the forum. It's not hard.
That headsteady should be replaced too, lots of options, or at least kept an eye on regularly. It's not visible with the tank on. I had about 13K miles on my original headsteady with no problems. I replaced it with a home made heim joint type.
You should also read up on the widowmaker frame as per your other thread on the frame crack. But I think you've already decided on that.