Darrell, here's what I did on our 83 Newport II. See attached picture (if my attachment worked!) Removed all the old wood insert. Remaining base and frame is fiberglass. Set in a new base with plastic wood to 1/16" below top surface. Cut and laid in a new wood laminate layer using waterproof Gorilla glue. Filled in remaining gap with fiberglass epoxy. Painted outside frame with marine enamel. Then I put 5-6 coats of marine varnish on. Loved the result.
Good thorough job, excellent results. I did the same thing on my first boat - a Grampian 26. Made the Hatch boards the same way then sliced them up into three on the table saw so I could store them easier (seal edges with epoxy of course.)