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What type of fabric is best to cover up a logo on a shirt? I want something that won't fray when worn or washed properly.
I might suggest using a sew-on decorative patch (sometimes called applique) instead. Lots to choose from on ebay and Joann's has some too.
Depends what the shirt is made of. Is it a polo shirt? A t-shirt? How big is the logo? You might want to try a patch or iron on applique pieces. You can find them at craft shops.
I think I would use applique stripes to cover this up. You can use scraps of tee shirt material to make these stripes. Here is a simple way to cover up your logo on your tee shirt.