4" of clearance above the grid is about the bare minimum. You will be lucky if you don't damage some ceiling tiles at that.
Elmer's makes a decent premixed wood filler. It accepts stain AFTER it dries. But it doesn't act exactly like wood. Spackling compounds do not bond as well as the purpose made wood fillers, There is also a wax "crayon" made by Minwax that you can use after staining and before sealing with poly. Just find a color that matches the stain, scrape a dab into the hole and seal. Overall though, the best option is to use a quality wood filler and stain and seal over it.
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