My 3 year old has a cavity on a baby tooth, does it need to be filled?

Probably. Baby teeth are important. It's important to maintain baby teeth for several reasons. At 3yrs, your child will have this tooth for several more years, so it's important to take care of it to prevent a toothache. The baby tooth will maintain the space for the permanent tooth that will replace it. If the baby tooth is pulled, a space maintainer is needed to prevent further developmental problems.
Most likely. At 3 years of age, odds are your child isn't going to lose that tooth any time soon. A small cavity can turn into a large cavity and an ifection. Don't take the chance. Get the tooth filled.
Dental hygene. A primary interest in caring for the baby teeth is theiir preservation during the rapid growth of the jaw/mandible. Premature loss will reduce the dental presence on the gumline & potentially lead to more crouding as the permanent teeth come in.The best judge of the need for a filling will be the dentist who evaluates the kid.