Fixing water damage

[Bec414]

I’m trying to fix water damage around the ceiling vent in my Cassette.
I pulled out what I could of the damaged with a plastic scraper and my fingers. Tried to cut it square with a razor blade. I know it will need squared up.
My Plan is to look at Home Depot for 1/8” something to fill in.
Not sure how to attach it though. Underneath is styrofoam and aluminum frame.