What's the best way to repair this hardwood floor damage? (Part 2)
You've got to get all of the rotten, water damaged wood out of there.  Have you been down in the crawlspace yet?  Looking at it from underneath will give you a better idea of the extent of the damage.  It's entirely possible that the joist(s) are compromised as well.

You will need to cut the subfloor (plywood or OSB underlying the wood floor) back to the mid point of the nearest joists (the beams under the floor).  And then lay in new material of the same thickness.

Once that's done, new flooring is in order.  Honestly, with that thin existing "hardwood" flooring, I'd tear it all out.  If you don't opt for that, linoleum may be you're best bet to match the thickness of the existing flooring.  Cheap, tough and waterproof.  Tile would be my preferred option if you redo the whole bathroom.  If you only do the portion shown, you'll have a significant lip because it will be quite a bit thicker then that wood floor by the time you put down backerboard and such.

Not sure what that blue cord is?  Does it have a wire core to it?  Any chance you have electric radiant heat in there?