Mark, that hole is going to be just like a cavity in a tooth. If you don't fill it, it will be a site where more rot can start very easily. Bondo is cheap, easy to work, will not rot (or about anything else). For the other questioners, I have never tried nails but I think that would be a problem. You might have to predrill for screws. You can probably even drill and tap for machine screws.
Part of the deal with the rot removal is cavity shape. You want to produce a cavity that is bigger inside that the outside hole. This usually works naturally with rot. Mix the Bondo when you are ready to fill the hole and you will have about 20 minutes working time--or less depending on the temperature. If you need to mix more batches to fill it, you don't have to wait for the inner layers to set. I was surprised to see Steve's comments about setting time since I usually have more problems with it setting too fast than not fast enough.