Yes and no. I have tried Cashmere a base layer, but usually I use my Cashmere sweaters as second layer when it is freezing and windy. The only problem with using it as a baselayer is that it can absorb a lot of sweat and therefore takes a long time to dry.

Regarding holes in wool products. People often think it is moths, but IMHO most of those holes comes from people washing the wool in washing powder with enzymes in it. The enzymes can potentially destroy wool.

"Recently it has become the practice to incorporate more enzymes in fabric washing compositions so that the compositions can be used at lower temperatures to save energy and reduce the damage to clothes caused by high temperature washing. There is also a trend towards washing woollen garments in the washing machine, even if they are marked 'hand wash only'. The damage caused by washing wool in a fabric washing composition containing high levels of proteolytic enzyme can be considerable in terms of weight loss of the fabric, shrinkage and eventual disintegration of the garment by formation of holes."
Source:
http://www.freepatentsonline.com/EP0614966.html

I have a Merino baselayer that accidentally was machine washed with enzymes (probably more than once) and also went into the dryer afterwards. It looks like a coarse fishing net from all the holes.

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Regards