You're right to be concerned- that's a serious repair. But nothing you can't handle. Forcing the sides back into allignment won't help- so don't bother. The main things to stick with here are:
1. You MUST use epoxy- WEST is good- you can buy a qt. of resin and the appropriate sized hardener and also the appropriate sized pumps from John R Sweet company (google him). He has everything you need.
2. DON'T use Kevlar- it breaks, especially in an application like this. You do need a synthetic however. I'd recommend using Polyester cloth.
3. The main theme should be a way stout inside patch- but this sounds so bad you'll need to include polyester in the outside patch too.
So rough it up big time on the inside with 36 grit. Cut oval shaped patches with the first one down being smallest and each one on top being like a fat 1/4" bigger all around. Go with 6 layers of 10 oz. glass and a final covering piece of polyester. If you really want to go big- throw an extra poly layer in the patch towards the end- but not exactly next to the last poly layer. Then do the outside patch- really rough it up with 36 grit and then go 3 layers of 10 oz. and a poly layer and then a final 10 oz. "scratch" layer- which will theoretically protect the poly. When it kicks- sand it and paint it with a final pigmented gloss coat to make it nice AND to protect it from UV. You need to do this step or the patch will degrade with time. If you take a small container to the paint store they will usually sell you a squirt of white pigment for like fifty cents.
The boat's wound is way structural. If you were to pin with a break like that- it could be fatal. You might end up spending $50 on this patch- but sheesh! Squirt boats are scary enough as they are!
If you're having fun, you're doing as well as anyone ever has.