you use the small hole, but they dont last long on prop nuts, the hole is more for clearing the nut on the starter its self.
when using propnuts you normaly flick start.
NEVER use the starter on the prop its self

putting the starter on the hub or nut is the wrong way to do things as it stalls the starter, a better way is to make sure the prop isnt against its compression, and then start the starter and touch it to the hub/nut, dont push too hard, if the engine locks you dont want to bend the con rod ( you'll also see the spinner melt and rubber fly everywhere ), small taps that turn the engine over once or twice are the best way untill it starts, if you've got a very stubborn ening with the needle settings wrong you can sometimes use the starter and play with the settings at the same time, bad practice tho.

PS i HATE starters, a good engine will always flick start and its kinder to it.

you also still have to prime the engine first before using the starter, or its like making your car engine rev at 5K before any fuel or oil has got in it