This is very typical for mature River Birch in our region, and fortunately the degree of leaf shedding pictured does not look concerning. Last year, much of the state experienced significant drought, and we're beginning to be "abnormally dry" or in drought status again thus far this year. This might explain why you haven't experienced this phenomenon to this degree yet, given the age of the trees. Watering the root zone can help minimize shedding, though it might still continue into the summer months, though not to the extent that the canopy will become sparse. Birch roots grow relatively shallow compared to some other tree species, so they compete more with anything growing around/under them, like turfgrass, other trees, shrubs, and perennials. Our Watering Trees and Shrubs page provides guidance, if useful.

The trunk hole is unrelated to the leaf drop, and is probably a site of an old branch lost to pruning or storm breakage that did not seal-over well before wood decay set in. This kind of decay isn't necessarily worrisome, as trees have internal methods of walling-off zones of decay to prevent any damage from spreading. The heartwood in branches and trunks is also naturally already dead by the time the wood has a certain girth, so what is rotting away is not living at the time. Cavities that aren't harming the tree are very valuable for nesting birds (Bluebirds, Titmice, certain Warblers, Screech Owls, and more) and other wildlife.

Miri