Hi Michael,
Yup, people do this! Basically as you describe, like a bottle/can wall using
cob, with
wood rounds as filler. It's called cordwood, apparently also known as stackwall, log end, stovewood, or cordwood-masonry. It can look really nice.
I've wondered a bit about longevity, given that you are exposing the more vulnerable end-grain of the wood... but around here you'd want high foundation walls and big overhangs to protect the cob portion anyhow, so maybe nothing to worry about.
Here are some examples. I love the mushroom-shaped one!
http://www.inspirationgreen.com/cordwood-homes.html
'Theoretically this level of creeping Orwellian dynamics should ramp up our awareness, but what happens instead is that each alert becomes less and less effective because we're incredibly stupid.' - Jerry Holkins