What is this hole at the front of the engine pylon on a Boeing 707?
This is because those engines have turbocompressors which are used to supply cabin air. 

The engine bleed air drives the turbine of the turbocompressor, which in turn would drive a compressor which would pull in air from the atmosphere through the front hole, compress it, and send it down to the Environmental Control System for use as cabin air. The discharge outlet for this bleed air is the long teardrop shaped hole in the side.

The tubocompressor can be seen in the image below.



Norm King at work on the turbo-compressor on Number 3 engine on 17 August 2006. Photo: Karen Glass; image from 707.adastron.com