I have a 10 year old leather chair (Whittemore-Sherrill) that has developed a 2x2 1/2-inch hole at the end of one arm. The leather there has weakened, probably due to a buildup of oils, but my lab may have scratched it as he often sleeps on it.

The leather is aniline. Can the hole be repaired? (A swatch was provided with the chair.)
Should I re-upholster? Is it possible to replace just the arms with, maybe a fabric? I'm assuming the leather may no longer be available.