Decay

I took off my plywood motor mount and this is what I found.

Is this elecrolysis

 

It appears so

Someone with TIG could fill the worst sections? Its a 2 mm thick transom?

 

Hard to say without more facts.
Is the plate ally?..if so, could well be poultice corrosion. Any wet wick like material, like wood etc, which is in direct contact with aluminium over a long period of time oozes a white hydroxide.

 

Those are pits created by crevice corrosion. Basically, the plywood plate has created of a zone behind it with lack of oxygen and high humidity (which can grow to form a permanent thin film of water). On the outsides of the plywood plate you have a surface exposed to air, therefore rich with oxygen. So an electrochemical couple is formed which rapidly eats the aluminum behind the plate. It is then furtherly accelerated by the chemicals used to treat the plywood, which will dissolve in the crevice water layer and eat out the protective oxide layer on the aluminum. Aluminum and stainless steel owe their corrosion resistance to a thin oxide film which is formed at the metal surface in contact with air. And that's why they are particularly subject to crevice corrosion - once this layer of oxide film is eaten out, the lack of oxygen in the crevice prevents the formation of another protective layer and leaves an electrochemically active metal surface exposed.
In conclusion, never bolt a wooden plate to aluminum or steel directly, without properly priming the metal first.