This seems like a half-ported query, probably due to some late night hacking on my part :)
Queries that have a returning into :1 are used for CLOBs or BLOBs. You usually insert an empty_clob(), and then use "returning into :1" combined with an ns_ora clobdml command that will return the LOB pointer into a Tcl variable that you can then stream data into. Ugly stuff. You switched it to varchar, which is where we want to go for CLOBs, so that's good