Answers

If it bugs you have the contractor fix. If you do not your eye will go to that spot everytime.

If it's paint grade, filling and sanding shouldn't be to hard to do. If it's a stain grade, it should be replaced. repairs on stainable wood always seems to stand out.

I assume by "cave" you might been "cove" or some other trim or millwork. It isn't a hard thing to fill any scratches, resand, and touch up an area like that, and that's something your builder should have no problem doing for you. Good luck!