That's a good question on block vs drilling, and outside my knowledge base.
My understanding is that a well-glued joint should be stronger than the surrounding wood, so a block is probably ok. Most guitars are made of a couple slabs of wood glued together. You could even do a hybrid of both, and drill the area with a forstner bit. Glue a round plug, then chisel or otherwise shape the sides of the plug flush with the cavity edges.
As far as where to find alder? Good question. I suppose you could even look at cutting up an unused fish-cooking plank. My first stop would be a local cabinet maker to inquire about scrap. We had our kitchen redone with knotty alder cabinet doors, for example. If I happen to see a scrap piece lying around, I'll PM you. If you're going for an opaque finish, you might even get away with a different hardwood in that small area.