Thank you! The cloth only serves as an indication on which ending route you are on. You don't actively have to do anything with it, once you've acquired it. (If you think about one major difference between each ending you can get within the same playthrough, that's what the cloth is wrapped around) That door in the basement can't be accessed by the player during the main game, however, there is a cutscene in the bonus room of the extended edition that shows what's inside that room. No sweat if you don't want to spend any money on the bonus content, I just wanted to let you know that you're not missing out on any secrets within the base game 😊