The stem should heal on its own, but you will need to remain vigilant for other larvae which may travel down from within the leaf stalks (eggs are deposited there also). There are almost certainly other larvae already on the plant. Wrapping might have helped before the SVB were active, but at this point the eggs have already been laid.
As far as prevention, there are several possibilities. If you can determine when the SVB egg-laying period is for your area (your local Ag Extension should be able to help with that) you could either cover the plants with screen or floating row cover during that period & then remove it, or wait until that period has passed before you plant. In the North, there is usually only one SVB egg-laying period (generally about now) and zucchini planted in July will usually be safe. But in some areas of the South, there can be more than one hatch... hopefully there is only one in your area.
The problem with covering squash plants to keep out SVB, is that the cover also keeps out bees... and without bees, no squash will set. You can overcome that problem by growing a variety of squash which is parthenocarpic - meaning it will set squash without pollination. "Sure Thing", "Partenon", "Cavili", and "Easypick Gold" are some commercially-available parthenocarpic varieties. Those could remain covered all season, removing & replacing the cover only for harvest.
"Would a daily spraying of neem oil do anything?"
Probably not. I tried doing that once, and it did not appear to be effective... the plants were still heavily infected.
One last note about prevention. When SVB larvae mature, they emerge from the plant & burrow into the ground to pupate. So once you have had SVB, there will likely be some larvae in the ground where the squash was grown. You should avoid planting squash again in that area for at least a year, because even if you grow squash covered next year, the moths would emerge under the cover & infect the plants.
Q