What about filing the imperfections with clear epoxy? Don't know if its safe or not.
I don't use any oil on mine - just plain it down smooth once in a while. I've always heard the natural acidity of the wood will prevent the growth of bacteria.
That may be true for some woods like Oak, Walnut, and Teak which have some very potent natural substances in them such as tannins, but I'm not sure some of the more mundane woods like Birch, Maple, and especially the softwoods would share this trait.
It's true that normal vegetable oils are not durable and will spoil after a while. I haven't heard the same things about true nut oils like Walnut or Almond - many people use these oils exclusively on cutting boards and butcher blocks, so they can't be
that bad for spoilage. Peanut oil, on the other hand, I wouldn't trust - and for food use, I think it's generally a good idea to avoid using a nut oil altogether due to allergy concerns. I'm also fairly sure that Danish oil should be safe, but don't quote me on that (unless I'm right!). Personally I use Tung oil if I want to darken or yellow the wood a bit, or just plain Mineral Oil if I want to leave it more natural. Any oil will yellow the wood a bit though.
Here are a couple boards I made last Winter out of some Birch crotchwood:
On the backside you can see a bark pocket void that I filled with regular, 2-part hard-set epoxy that you should be able to get from any hardware store. I forget who the stuff I used is made by specifically though. I have no idea if it's foodsafe and to be honest it didn't really cross my mind at the time, since I had no intention of actually using this thing AND the defect was on the back. The handle here is actually Douglas Fir and is a bit undersized but I was limited to the thickness of the piece, since I lost a fair bit planing the warp out of the original rough cut.
Another:
This one was otherwise going to be a scrap piece from another smaller crotch. I cut the one edge irregularly to maximize the amount of figured wood I could keep - the wood I cut away at the corners had heavy edgewane and prevented the piece from being left as a larger rectangle. As you can see, it also has an epoxy-filled bark pocket on the birch side. I wanted a sturdier handle, so I augmented the piece's thickness by gluing a panel of contrasting wood on the other side since it really had no character anyway. The dark is Mahogany, and I have no idea what the white is. Both were salvaged from pallets though. My cousin and his wife liked this one so much they bought it off me a while ago. I told them they could HAVE it but they insisted on paying, citing my being laid off right now. Fair enough, I guess.
Both of those boards were finished with just plain mineral oil, which I actually got from the pharmacy. Couldn't find any at woodworking supply places locally. I've never had it spoil on me though, I just give the pieces a light sanding and another coat of oil as needed every year or two.
