So having a look at my bearings last night and ive noticed that one of the pawls is loose in its hole. Swapped them round and it seems that the hole its in has got slightly bigger.

Hub scrap?

New freehub time

As above you can replace the freehub for £60 or something.

will i die if i run it?

You will certainly die yes.
Maybe not because of your hub, but you will die.

basically do i need to drop the 60 quid on it or can i run it as is?

Take out the dodgy pawl and run it with three- you’ll be fine unless you have froome like leg power

is the stainless one worth it over the alloy one?

Yes.

will be heavier but last longer…

Back in the old days absolutely everyone had at least one broken pawl spring (while telling all their mates how bombproof Hope are) so don’t stress. If it works fine as is just leave it in and forget about it, if it’s causing problems take it out and run on 3 and forget about it, in either case make sure to tell all your mates how bombproof Hope are, I wouldn’t spend a penny on it though if I was you!