Question
Read advice suggesting not to fill holes in for instance limbs.  What about covering hole with rubber or plastic either sealing or stapling hole which faces upward.  Has anyone studied placing a wood maybe 1/2 inch wood insert (conforming to circumference of hole and sealing outer remaining crack with sap?

Answer
The trees living cells are just under the bark and the tree will try to grow over a hole if it can. The "wound dressing will kill these cells and slow down the expansion of the growth over the hole. IT may not ever grow over the hole but that is ok. A decay fungi will enter where the wood is exposed and will over time cause the woody dead cells to decay and may cause the tree to become hollow. A tree can survive well in this condition. Adding a plug will not help since the decay fungi will grow from within and it would be like filling a tooth without first removing all the decay down to solid cells. In a tree this can not be done. Research has been done and sealing the hole increases the rate of decay. Do not worry about the hole.