proper tub/shower diverter repair?

[rmeek]

I have a single knob control setup with a lever on the spout to turn on the shower. The diverter was leaking, sending water into the wall & discoloring the ceiling below. When I removed the spout/diverter (slip on type), I discovered that the hole in the fiberglass shower/tub for the pipe is a ragged one. How do I fix this so that the next time the diverter seal goes away water isn't being sprayed into the wall?

[krow]

Fill in the jagged hole with silicone chaulk (mildew resistant) and replace the diverter spout