[RustNeverSleeps]

Thanks for your suggestions.

I'd glue in a bung and then cut it off flush.

I drilled a 1/8 pilot hole but did not add a proper countersink or drive each screw evenly in depth. I thought about mixing up some sawdust and titebond 3 and use that as a filler. But I am not familiar with how that might turn out in such a visible location, so I hesitated to try it.

I generally use window glazing for filling nail/screw holes. I wouldn't consider anything other than caulking for joint cracks.

I researched that a little more and that does look promising for filling nail holes. I assume you are refering to products like DAP '33' Window glazing. I saw that in a plastic tub and a similar looking glazing product in a red caulk tube that was not labled as '33' so I was not sure if it was the same DAP roduct or not.

I almost got the '33' glazing but I ended up purchasing a tub of DAP "Weatherproof Patching Compound". Apparently this is just a new name for their "Platinum Patch Filler" product. Since I am going to be working on some PVC in the coming months I decided to try it. It was a little more expensive but I hope to use for both the wood and PVC. I don't look forward to trying to remove all that "Plastic Wood" so that I can properly complete the work.

 

[RustNeverSleeps]

In fairness to the DAP Plastic wood it may have not been fully dried/cured before the primer coat was applied and the rain fell. But I still cannot believe this product is labeled for both the interior & exterior. If the paint is scratched or fails in some way, the filler will easily fail when getting wet. Not as quickly as drywall mud but not really that different.

I was able to remove it all using a brush and water. Places that had not gotten wet from the rain were also easy to remove. I have not made any further repairs yet.

 

[RustNeverSleeps]

In case one is reading this in the future, some follow up thoughts about the products mentioned above used to complete the project. This is only after a couple of weeks, but it has rained nearly every afternoon, with a few heavy downpours.

1. "DAP Plastic Wood Filler" is NOT recommended for the exterior, no matter what the label states. It might work to fill a nail hole on a vertical surface protected by a roof, but I would avoid it. A few days after the picture above was taken the same plastic filler which had been used on the lower rail failed completely. Even though it had been primed and painted, it did not take long to fail. After a heavy rain the steps were covered in plastic wood droppings as it had completely washed out.
2. "Minwax Stainable Wood Filler" appears to work on the exterior, though I used it sparingly in comparison to the other two products, and not exposed to direct rainfall.
3. "DAP Weatherproof Patching Compound" does work pretty well on the exterior. Once it dried/cured it was stable, even if left unpained for a few days and directly exposed to heavy rain before painting.

The Weatherproof Patching Compound is not foolproof, it needs 24 hours to cure and if it gets wet before curing it will swell up and get soft. When I came back to the project the next day after an overnight rain, I did not wait to see if it would dry out on its own and shrink back down if waiting another day, I chose to remove patches that were soft and reapply some fresh compound from the tub. It spreads almost like drywall mud and is easy to sand. It is sensitive to the moisture content of wood surface before it dries, as it shrank slightly when applied to kiln dried wood and expanded slightly when applied to some southern yellow pine (not pressure treated). In both cases a quick sanding and second coat left a nice finish. If the screw holes had been slightly overfilled the first time then a single coat would have probably been sufficient.