I had some balsa core rot at my port shroud attachment point a number of years ago. Yard removed the top layer of fiberglass and the rotted core until they got back to solid balsa. New balsa was installed, the deck reglassed and gelcoated. The color and nonskid pattern match to the original is close, but its easy to see a repair was made.
If you can get all the rotted core out as you have been doing, filling with epoxy and redrilling is fine. My bad area was over 1 square foot.