hey buddy, there are many ways to do this, toothpick/satay stick is one way. What it does it that it fills up the screw hole which is too loose.
imho it's not very reliable, it's reliable for other applications but might not last worry-free in bearing the weight of the guitar.
What i use is that red rubber ring used in mounting photo hooks on the wall.
Alternatively, find an old cable, and rip off the thick insulating rubber-casing, cut it open and roll it into a smaller tube, stuff it into the hole till there's no space left, then screw your strap pin in.
Rubber compresses better than wood, hence it will hold better than toothpicks.
hope that helps.