Cute quilt. It does look more like a worn area rather than a dog chewed it. Anyway, I agree with trying to match the color with a Kona solid and applique it on. I had a quilt that my kids loved and fought over and after 25 years it disintegrated. No amount of patching or applique could save it. "Quilty" died. It had a blanket inside it for the batting and was made when old clothes and other scraps were used for the piecing on top, so it was worn more in some spots than in others. I kept patching it and finally gave up. It was a well loved quilty and had been washed so many times it was just shredded. Show us a picture when you get yours finished.