It's a blinking light bulb, which is even visible in the opening original FX for Court Martial as Kirk's log recounts the severe ion storm. And later as the sequence is reused again in the same episode. And no wonder that it blinks, as MJ and GR were aviation guys; ships don't have blinking nav lights but aircraft do.
You can see the bulb's installation in this xray image at the Smithsonian ASM
There is no body nor is the pod recovered else Cogley couldn't proclaim "Finney is not dead!" So I think there is a strong implication that Finney was really lost and presumed dead. No air, ran out of air, couldn't survive in the ion storm, etc