What is wrong with my Script formatting?

It opens up the Gui perfectly and all however I want it so when a player presses "e" and they ARE near the part.. it disables the Operation script located inside the part they are near.

Keybind function

local mouse = game.Players.LocalPlayer:GetMouse()
mouse.KeyDown:connect(function(key)

if near and key == "e"  then
	interaction.Operation.Disabled = true
end

interaction is defined as the part they are near. However I can't put it in the function update(player) or my script will give me red syntax lines. And if I just leave the keybind function where it is in the script. If I do, the script says it forgot to close.

Keybind function must be in function update(player)

function update(player)
    -- We defined the table of "interactions" above
    local torso = player.Character.Torso
    local near = nil -- Near nothing.
    for _, interaction in pairs(interactions) do
        if (interaction.position - torso.Position).magnitude <= 3 then
            -- Within three studs of interaction's center
            near = interaction
        end
    end

    local playerGui = player.PlayerGui
    local hasGui = playerGui:FindFirstChild( interactionGui.Name )
    if near then
        -- I am near an interaction
        if not hasGui then
            interactionGui:Clone().Parent = playerGui
        end
    else
        -- I am NOT near ANY site
        if hasGui then
            hasGui:Destroy()
        end
    end
end



local mouse = game.Players.LocalPlayer:GetMouse()
mouse.KeyDown:connect(function(key)

if near and key == "e"  then
	interaction.Operation.Disabled = true
end





-- Update all players
function updateAll()
    for _, player in pairs(game.Players:GetPlayers()) do
        if player.Character
            and player.Character:FindFirstChild("Torso")
            and player:FindFirstChild("PlayerGui") then
            update(player)
        end
    end
end

while wait(0.1) do
    updateAll()
end

Full script

local me = game:GetService("Players").LocalPlayer
local mouse = me:GetMouse()



-- REQUIRES: model and descendants of model can have :GetChildren() called
-- on them.
-- PURPOSE: Given a model, returns a list of all of the descendants of that model.
-- [If result is specified, it will add the descendants of result to model.]
function descendants( model, result )
    result = result or {} -- No need to pass in result
    for _, child in pairs(model:GetChildren()) do
        table.insert(result, child) -- Much cleaner way to add to list
        descendants(child, result)
    end
    return result -- Return the accumulated children
end


-- PURPOSE: Returns whether or not this part is an interaction site.
-- REQUIRES: part must be a ROBLOX object.
function isInteraction( part )
    return part:IsA("BasePart")
        and part:FindFirstChild("Interaction")
        and part.Interaction:IsA("StringValue")


end

local interactions = {} -- List of all interaction sites.
local everything = descendants( workspace )
for _, object in pairs( everything ) do
    if isInteraction( object ) then
        table.insert( interactions, object )
    end
end



-- Define the GUI we give to players
local interactionGui = game.ReplicatedStorage.InteractionGui

-- REQUIRES: player is a Player, they have a Character (with torso) and PlayerGui.
-- PURPOSE: Shows or hides (by deleting/inserting) the InteractionGui
-- based on whether or not they are close to any interaction site (in `interactions`)
function update(player)
    -- We defined the table of "interactions" above
    local torso = player.Character.Torso
    local near = nil -- Near nothing.
    for _, interaction in pairs(interactions) do
        if (interaction.position - torso.Position).magnitude <= 3 then
            -- Within three studs of interaction's center
            near = interaction
        end
    end

    local playerGui = player.PlayerGui
    local hasGui = playerGui:FindFirstChild( interactionGui.Name )
    if near then
        -- I am near an interaction
        if not hasGui then
            interactionGui:Clone().Parent = playerGui
        end
    else
        -- I am NOT near ANY site
        if hasGui then
            hasGui:Destroy()
        end
    end
end



local mouse = game.Players.LocalPlayer:GetMouse()
mouse.KeyDown:connect(function(key)

if near and key == "e"  then
	interaction.Operation.Disabled = true
end





-- Update all players
function updateAll()
    for _, player in pairs(game.Players:GetPlayers()) do
        if player.Character
            and player.Character:FindFirstChild("Torso")
            and player:FindFirstChild("PlayerGui") then
            update(player)
        end
    end
end

while wait(0.1) do
    updateAll()
end

It seems you didn't quite end the event function correctly. Also remember, anonymous functions require a specific amount of closing parenthesis at the end. To fix this, let's do:

local mouse = game.Players.LocalPlayer:GetMouse()
mouse.KeyDown:connect(function(key)
if near and key == "e"  then
    near.Operation.Disabled = true --Since you set it to that.
end
end)

Source

http://wiki.roblox.com/index.php?title=Anonymous_function