Answer: The holes are probably due to boring insects but might also be caused by bird pecking. The moths and the bugs are just there because the insides of the tree are exposed and are providing hiding spots or places to feed. I can't tell by your description just what might have caused the damage to begin with. If the tree is a valuable specimen you may want to hire an arborist or tree professional to come by and inspect the damage - and suggest remedies for the problem. Wish I could offer more assistance but without being able to inspect the damage, I'm at a loss to suggest control or repair of the problem.
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