I recently had an insulation company blow dense pack cellulose into my walls. They drilled the exterior under the vinyl siding.

I happened to notice one spot near a window where the drill from the cellulose work caused a small piece of the original wood siding under the vinyl to come off. I took a closer look and, not being an expert on windows or flashing, I'm concerned that the window may not have enough flashing and/or the original flashing (now 60 years old) may no longer prevent water from leaking in.

Below is a picture of the area at the top right corner of the window. I've pulled back the vinyl that would normally cover this area to show what's underneath. The top right corner of the window is on the left edge of the picture. The white styrofoam hole plug from the cellulose drilling is on the right. Between the hole plug and the window, the original wood siding is missing and what appears to be a black felt-like paper material is now exposed directly under the siding. Before the drill work there was the original wood siding and then a thin layer of styrofoam covering this black material.

Is this a problem? Is there something I should do to seal this up? Could I simply caulk around the area where the old wood siding was?