[herr_oberst]

This would be a fun project.

Using a cardboard template for reference, I'd cut the bad wood out, make a wood patch to precisely fit the cutout, make an oversize plywood backer, glue the backer to the back of the playfield, the patch to the frontside and redrill the hole.

I might even incorporate the shaft of the flipper into the overall patch.

Things I'd be careful of:

Take care with the shape of the patch, keeping it as small as possible and no sharp corners.
Try to match the species of the wood to the playfield or at least the character of the wood, ie hardness
Make sure the patch was the exact thickness of the playfield
Use thin plywood for the backer
Use strong glue to attach the new fresh wood
Carefully sand the top of the playfield, keeping the sanded area to a minimum
If I were feeling artsy, try to match the graphic using masks and brush paint.