The knot-hole is significant because it establishes a connection between the children and Arthur (Boo) Radley. While the children are still afraid of Boo, they had continued to play games centered around the mystery of Boo. When Boo puts those items in the knot-hole in the tree, he is reaching out and playing along. This also further establishes Boo as a "mockingbird," one who does nothing but sing for others. Boo keeps to himself and only does good things that others may or may not notice. Just as the mockingbird puts something good into the world (song), Boo puts these items in the tree to brighten the childrens' day.
When Boo's father closes up the hole, this signifies his (Mr. Radley's) abusive nature. This symbolizes the way in which Mr. Radley's poor treatment of Boo has led to him being "cemented" inside the Radley house. Jem seems to realize that some significant connection has been terminated with Mr. Radley filling the hole with cement:
He stood there until nightfall, and I waited for him. When we went in the house I saw he had been crying; his face was dirty in the right places, but I thought it odd that I had not heard him.