Working in an uphostery shop, there are many ways to fix it. I'd just use any that work, no right or wrong. As far as a cap, there are a couple options. Dashtop makes a cap and an entire dash replacement cap in both Z styles. Either can have mixed results. I installed a cap into a 76 Merc. SL450 today and you wouldn't be able to tell the differance.
I would suggest the full cover over the half, the lines blend better.