Ned and Crash did a great job of answering your questions but I'd like to add to what they've said. Surprisingly, woodpeckers do not live solely on insects from hard trees. They also eat fruit and seeds.
Here is a link to which fruits will atttract which birds and surprisingly, you'll find that many of the fruits will attract woodpeckers.
What Birds eat what fruit
And from the Florida birders guide is an article that expands from fruit to include information on other feeding habits and also nesting. Again, it's observed that woodpeckers will use man made nests instead of building.
Having lived for many years in the habitat of the Pileaated Woodpecker, the classic example of the real strongly built, chip the wood away species, I can tell you that they favor softer woods like pine over oak, and a dead tree over a live one. I have spent many a year watching and studying woodpeckers and they are remarkable critters, but no real mystery.
Notice in this picture from the Wake Audubon site, that the Pileated Woodpecker nest is built in a pine tree.
Wake Audubon site
The picture is in the left colum about halfway down.
I have never observed a Pileated Woodpecker nest in anything except a pine tree or dead tree.
By the way, the Pileated Woodpecker is BIG and most impressive. Awesome even.
Aslan is not a Tame Lion