That looks like a good time! I believe I see the rudder, looks like a barn door. If we saw what your steering gear looks like I'm sure you would get some suggestions to improve it.. lots of crafty people live here...
I believe it's simply a raw water fitting that you connect a hose to, flip a switch and a pump pulls sea water from the thru hull fitting you saw on the hull when you back flushed it..
Yep blisters are the bane of many sailors who keep their boat in the water. A lot of folks Dremel them with a burr, let them dry for a few months and then fill them with epoxy filler and several coats of barrier paint.. but no guarantee they won't come back.. they probably will..