A tree in peril?
It's difficult to say with any certainty what's going on with the tree since I can't tell what the relationship is between the close-ups of different wound pictures and the shot of the fruit and/or what the state of the overall tree might be, or perhaps these are from each of your trees? I don't know the progress of the damage... when did it appear?, is it getting worse or stabilized? etc. etc... In any case, it is doubtful this degree of bark damage would be related to caterpillars. Do you know what kind of caterpillars (tent caterpillars for example often colonise my apples here in New Brunswick in late summer, but are easily removed and don't do any long-lasting damage)?
This kind of injury actually looks more physical, than insect-related, like something hit the tree and tore off chunks of the bark. And by the look of the decaying exposed heartwood this damage took place some time ago, but not so long that the tree is showing any signs of healing. The outer bark is essential for the tree's survival since it is in the outer layers (between the "bark" and heartwood) where one finds the "veins" that transport water and nutrients between the leaves and roots. If these are cut or broken the tree cannot feed itself.
Not knowing the state of the whole tree, I can only go on the one picture showing the tree seems to be fruiting, so that's good. It is clearly still able to get nutrients up and down, at least partially. If the tree is otherwise healthy, it will proceed to try and heal the open wounds. It is not obvious that such a large wound will heal (the smaller ones should be more possible), and it will take a number of years.
It looks like a fairly substantial tree trunk. How old is the tree? Although some apple varieties can live decades, it is possible the tree is simply reaching the end of its productive life (and like all of us aging, more susceptible to disease and injury).
I can't say if the tree is peril or not; it is clearly in trouble. It may be worth giving it another year or two to see how it fares... keep the grasses/weeds cleared or at least cut around it, keep it well watered and perhaps consider a bit of tree fertilizer in the spring (but be careful... low nitrogen formula only and don't overdo it: you don't want a big flush of soft growth), keep the fruiting to a minimum (helps to let the tree concentrate its energy on healing), maintain a good pruning program, and track the injury over time... does it continue to worsen or does the tree start to show signs of creating new healing wood on the edges of the wound etc? ).
Or you can decide to simply cut your losses and consider taking it out and starting a new apple of a new variety that is well suited to your area. There are many new varieties that have come out in recent years. Or you could remove the worst one and replace it, seeing how the second one which is less affected fares over the next couple of years...