Hostas are a favorite of slugs—nocturnal, hiding in soil/mulch by day, shredding foliage at night. Flea beetles, aphids, and whiteflies also attack hostas, but slugs cause the "ground-level destruction" you describe.
Small flies in soil = fungus gnats (larvae eat roots/organic matter). Control:
Softball-sized depressions = likely earthworm castings (beneficial) or cicada killer wasp burrows (solitary, harmless). Grubs cause irregular brown patches, not neat depressions.
Slugs are manageable. Start with Sluggo tonight. Your hostas will recover if the crown is intact.
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