What is the purpose of the wing nut on the link through the firewall?

How does one set its proper location?

There's a little lock nut behind the wingnut, correct? Unless the wing nut is atached to the ball I'd say take it off and throw it away, adjust the ball to the length you want and tighten the little lock nut, not that anything is going to rotate once the balls are snapped on.

Overall adjustment of that rod to the bellcrank is just to minimize slack in linkage and heaven knows there is some......