Yes, the screw you denoted in blue is the right one. It holds the lock mechanism to the steering column. As Naj told you, you also need to remove the clamp (#48) and loosen the bolt on the clamp between #46 and #47. Once you have done these three things, you can pull the steering column down and to the left enough to remove the lock mechanism from the short tube on the steering column in which it is held. Then the lock mechanism is free and can be removed.
You may be able to move the chrome ring around without loosening the clamps on the steering column, once the small bolt is removed, but it sounds like you have already tried that. Loosening the clamps will take pressure off the lock, and you should be able to re-orient it.
HTH.
Joe