Yes, the instructions to use the nail is what should have been done when it was first installed the port, not now. You can try to pick out what is rotted, but I agree that if you can feel the "sponginess" then it is going to be deeper than you can reach with a knife or chisel. Do you know what the material of the core is? If it is balsa you may be able to get away with either drilling and filling holes but it is likely plywood as this is a high stress area as it is constantly walked on. If it is plywood you are in trouble as it wicks the moisture between the layers and likely the whole thing is at least wet if not rotted. The other thing to keep in mind is that any hacks like the drill and fill methods are very hard to undo once the time comes to do the repair correctly. Lots of people recommend drilling lots of holes and even go so far as to fill a grease gun with resin/filler mix and inject it under pressure till it comes out the surrounding holes. Every time I read this I cringe, as I think wow that is going to be a mess to clean up and fix properly some day.