We bought and planted a tree that was called an "American Oak" about 3
years ago. It's currently about 3 - 4 cm (2 - 3 inches) in diameter.

A few days ago, I discovered a hole in the trunk, about 170 cm's from
the ground (under 6 ft). The hole itself is about 1.5 cm's in diameter
(just under an inch). A wire detected that it went about 15 cm up and 4
cms down (about a foot up and a few inches down).

After probing with the wire, I looked away for an instant, and then had
the distinct impression that I saw something out of the corner of my
eye pop its head out of the hole for a fraction of a second. I wasn't
able to get it again. It looked like a huge worm or something. Or maybe
it didn't happen. But something made that hole.

The hole occupies about 20% of the diameter of the trunk.

My question: will the tree grow in respect to the size of the hole, so
that the hole becomes insignicant, or will the hole "grow" with the tree?

Should I cut it down now instead of pealing it off my house later?

Should I fill the hole with anything?

Any thoughts will be appreciated.