Thankyou for asking about the hole, I was wondering the same thing....It's here we get most off our questions answered !!!!
You could put this design on a towel or other item to hang on a hook or add a ribbon or tie to hang a towel with.
I would imagine it is for the top of a kitchen towel and it is for hanging it up. I could be wrong
you are right, it is a towel hanger, I don't see any directions on how to attach it
I'm not sure if you need to put tule, some other fabric or if you can just go with a wash away stabilizer. Hopefully it is a FSL.