Thanks stringy! But after thinking about it some more, I think there is a better solution that allows the use of the original Nylon covers and has a more finished appearance.
Using the same cap screw, I located a spot on the upper outboard side of the locking lever. This did require a little modification of the C & G frame. In the pic below, a threaded hole is drilled (green) on the lever below any spring interference. A slightly larger notch is cut out on the frame (red) to receive the screw when locked.
Here's what it looks like assembled and locked / unlocked:
It turns out there is a knob available for cap screws -- That's one of the reasons I stayed with this size. I even found it at Home Depot in matching color and texture! It's a press-on fit right over the "cap". This is what it looks like from the side:
A couple of miscellaneous notes:
1. The locking cap screw has to be removed to install the C & G unit, so the end thread can't be crimped. But since the Nylon handle is also partially threaded, it acts like a Nyloc nut. The screw can still be hand operated but it is not free to roam in and out, so it shouldn't wander out of position.
2. a Dremel tool with high speed tungsten cutting bit did the notch work.
If Hobie ever feels the need, this would be a very easy mod for them to set up.