Earwigs are not causing this ... but they love cool dark holes and decaying plant material, so a hole in a tree is perfect in their books. I couldn't tell you what did cause the hole, though, or how much of an issue it poses.

I would trim the peeling bark, so it doesn't continue to pull off and strip the tree further. Just use a sterilized sharp knife (x-acto knife or boxcutter is fine).

A bigger issue that I see, or rather don't see, is the root flare. I think your tree may be planted too deeply. Remove mulch and soil from around the base until you find where the trunk starts to flare out ... that should be at the surface level, not buried.

Thank you I can certainly do that. Do you think I should apply anything to the hole?