Birds and squirrels make nests. One winter I regularly observed a tree inhabited by a raccoon. The hole, several feet above the snow, was spilling over with scat, and a well-traveled path went from the tree up the hill. Insects and trees have a close relationship, joined regularly by birds. In fact, the bird is there because of the insects that have invaded the tree.
Bees utilize a cavity for a nest.
Caterpillars arrive for a foliage feast. They eat the layer between bark and inner tree, then overwinter at the end of a tunnel. Other beetles leave round holes in the bark where they leave and enter the wood. The hemlock stump in my yard is close to the ground. You can see bore holes, evidence of insects.