I am having trouble starting my '74 1.8. It turns over an tries to start but it just won't catch. My oil sender is leaking from the top of the unit, not around the threads.
My question is, would a bad sender unit prevent the engine from starting?

On a stock 914, no.
Oil Pressure switch is not tied into any of the fuel or ignition systems.

Check the basics first, fuel, spark, compression.

Then read up on FI diagnosis, L-Jet on 1.8.
L-jet is very susceptible to vacuum leaks and blow air flow meters from back fires.

Jim

If it's a stock oil pressure sender (it's really a pressure switch) I've got some. If you have an oil pressure gauge then you need to be sure to get the same sending unit. Oil leaks on the top of the engine can cause a build up of crud that can give you cooling problems.

As Jim said, the oil pressure switch has nothing to do with your starting problem. You need to go down the standard "non start" list until you find the trouble.