Yes, I believe thats a ground wire that hooks up the the control panel. I believe theres a threaded post sticking up on the CP where you would nut it on. The nut probably vibrated loose and fell off.
Grounding the CP was done on the newer games, because they are much more sensitive to electrostatic damages. Static electricity could travel down the control wires and into the PCB, if it were not grounded very well.