Warren,
Yes, if the under cut is adequate. If you just coat the edge of the hole, then there is little protection. If out undercut by 1/4", and fill with epoxy, then this will prevent compression.
On the other hand, I have done "autopsies" on some 30 year old boats with plywood on the foredeck where the main cleat was, and there was no compression damage, and minimal water damage. In these cases there was excellent sealing of the hole with a bedding compound. So if there is plywood, it seems to be adequate. The question is does C Dory use plywood in the position where cleats are installed?
For my windlass, I backed the entire area under the windlass with an aluminum plate, and did minor undercutting of the holes. This seems to be satisfactory. This area was balsa cored in both the Tom Cat and CD 25.