Basically, I was wondering because of this larger hole that looks as if it was once the right size for the old fashioned black guttering pipes, would be causing a wet wall situation. Could rain water or moisture seep into the inside walls through this hole? Should this hole be sealed over? The wet wall is literally on the other side of where the pipe comes into the house.

To clarify your question a bit - you're asking about the situation of an old waste pipe (cast iron, perhaps) having been replaced with PVC waste, and since the outside diameter of the PVC is less than the old cast iron pipe there is a need to patch the foundation wall to fill the gap. Yes, of course - the foundation wall should be patched and water-proofing applied to the outside of the foundation wall to prevent seepage of ground water through the foundation wall.

You say you have alwaist pipe that connects to a hole.What is the waste pipe draing? Where is the hole located? Is your rain water and sewer connected? Can you give us more information? Back to you, Tom