You have done a good job of inspection, and averted a disaster! That is a crack in the weld. Get the new part and install it, before you sail the boat again, is my recommendation.
Check this description from the Catalina Direct page for the replacement (emphasis mine):
The redesigned
stem fitting fits the Catalina 320, Catalina 34, and Catalina 36. Multiple improvements have been incorporated into this design.
Improvements:
- Doubler at the top of the forestay tang has eliminated the transition where some have failed.
- Thick full length, 3/8" stainless forestay tang takes the load to the hull without weak points.
- The vestigial anchor rollers have been eliminated making room for a proper anchor roller. See "May we also suggest" below.
- Gussets on either side of the deck plate have been eliminated. These supported the anchor rollers but were never part of the support for the forestay. They were however a location where cracks would begin.
- This new stem fitting is a much cleaner and stronger design.