Is the knock sensor required on a 2.0 spi engine? I cant find the connector

Does it knock 'sitting still' with engine running?

Looks like the knock sensor is not used in 97 but is in 98 according to the Mitchell1 wiring diagrams. I just had a 97 with a knock sensor installed on the back of the block, but no wiring harness connector to go to it. Perhaps they installed some 98 spec. engines in some 97 models & just left the knock sensor disconnected. Your knocking noise is likely a mechanical issue, not related to the knock sensor.