I want to create a shape that has a hole/space in the center and then I want to fill the outer shape with text which would flow around the inner hole. Everything I have tried results in a compound path which the area text tool does not like. There has to be a way to do this. The green space in the screenshot is where I would want the text. I did see the same question previously asked with an answer to use the knife tool but I can't make that work. Thanks.
You can achieve this effect using TEXT WRAP. Rather than trying to create a single shape for the text, create one shape to contain the text and another shape that the text will then wrap around.
For your example, create your cross and the offset shape and then fill the offset shape with text like this:
The cross is in front of the text.
Then select the cross go to
Object > Text Wrap > Make
This will create an offset text wrap around the cross like this:
To get the text to cling closer to the shape, go back to
Object > Text Wrap > Text Wrap Options... and adjust the offset down to zero:
Job done! You might need to make a few tweaks to line breaks and leading to get a nice flow, depending on the type size and font and how much text you have.