Since the bitty cove is a part of the pond plain dirt will flow into the pond proper in the form of muddy water created by rain and our irrigation system. Good point made about natural pond banks.You don't indicate the size of this area, but I think that you need not be overly concerned with water circulation for this area. I would use just plain Top Soil, like the Big Box stores sell in bags. I have a similar area on my pond that is 8' x 8' x 1.5' deep that is filled with just plain dirt. Never gets smelly. Does the soil immediately adjacent to a natural pond or lake get smelly?