Yes, I've used sights of that sort on several rifles. Similar to the one pictured but smaller. I like mine higher on the tang, next to the hammer. That is still close enough to the eye and being higher means a very short section of screw is exposed. If you use a 10x32 screw it is very sturdy, I doubt you'd bend even an 8x32, and it is somewhat protected by the hammer. I feel this is much less likely to be knocked out of alignment than any open sight, although the front is still vulnerable.
If you use a hardware store thumb screw you'll need to burn off the plating by getting it red hot and scrubbing with a wire brush, then it will blue or brown OK.
For hunting I drill the aperture 1/8", although a 1/16" hole may be better for target. With a 32 pitch screw, one full turn will give 3-4 moa of elevation, depending on barrel length. If you can get the hole exactly on center you can also use half turns for finer adjustment.
I usually file the thumb screw to make it round and that looks neater than the oval screw head.
One of the advantages of a peep is that you can use any sort of blade or bead up front and see it much more clearly. You also see much more of the surrounding area with no rear blade blocking the lower half of your field of view. Peep is THE way to go on a hunting rifle. :v