If you are using money, time, and effort to finish this quilt-- why have repaired holes in it? You can't magically make that fabric whole again. If you applique over it, it will just be a bandage. If you replace it, it could look like normal patch work, where a person used scraps of fabric that didn't exactly match. That's okay, it's often done! I'd choose a red that looks similar and it would be a satisfactory solution.
The border is your choice, use your own preference. Besides cutting the edge straight then sewing on the border strip, or appliqueing the top over the border strip, you can also use the method where you face the hexies. Here's a tutorial if you haven't seen that way yet.
http://faeriesandfibres.blogspot.com...uilt-with.html