Replacing the screen-glass and digitizer will fix it. I have done a number of these. Easy way is to replace the glass digitizer is using one part module of glass with digitizer bonded. Be careful handling the LCD. Do not bend to force it when you swap to new glass and digitizer. You can get mysterious areas on them (LCD) that look like circular burn marks from mishandling=shot. You have to scrape off the old glass and reuse the bezel by heating with heat gun or even blow dryer to loosen the glue. New unit has tape to adhere to bezel. You can use a pre-assembled ready to go front/bezel with the home button and just add the LCD except many/most of the aftermarket 3rd party home buttons feel cheap or even loose and not of the same quality.
Yes. This collar is under the yellow circle screw from that link above. Mine popped out though the phone seems to work without it, it is disturbing not to have in there. All instructions for logicboard removal should warn the person on this as it pops out. It is so tiny that trying to reposition it (better caution could have been taken) it shot out somewhere in my kitchen. I may make a small collar out of aluminum since I am concerned this MAY minor-ly may effect the grounding. If you are like me it is quite disturbing to have something not go back in a disassembly the way it was or missing. Just about NO information about this is available AND the collar or insert is not in any IPhone 4 screw kits I have seen