You're going to have to grind out that whole area well into the parent material at least 3 or 4 inches. Fill in the whole area with fiberglass , smooth, then apply gelcoat to match. I imagine the inside is the same? Is it only on one side or both sides? You'll have to find out what causes that. Water leak ,maybe wrong material used for a plug , maybe "hull slap". I really don't think grinding with a dremel and some epoxy is a fix. Good luck bro.