at 800-1000 your idle is way too high
make sure the shift interrupt switch is working properly. you may need to swap your lower shift cable as they only last about 15 years
get your idle down to 600-650 RPM.
bolt is most likely rusted in place due to the wet strap. try turning the bolt. you may have to cut it off like I did on my old shoreland'r trailer with the profile 2000
How was it rebuilt?
Was a piece of fishing line pushed thru all the passages to make sure they were clear?
have you verified that the points are set correctly? 30-32 degrees of dwell and 4 degrees BTDC timing?
have you checked compression?
VW's have used o-ring seals for decades on the intakes. they also do not run coolant thru their intakes, even the TDI marine motors. you have to be a bit more specific about your leaks.
start at the battery, remove and clean every electrical connection all the way to the motor, then follow the wiring up to the helm. you have typical bad connections.
any suspect wire or cable that is "crunchy" gets replaced.
because your lower shift cable is probably hanging up or the shift interrupt isnt working. The alpha drive is a dog clutch drive, so you have to take all load off the clutch to disengage it. that means momentarily killing the motor as you shift. that is the function of the shift interrupt...
the issue without a thermostat, is the cooling water will not be correctly controlled and the motor will overheat. at a minimum, if you remove the thermostat, you need to run a restrictor plate.
replace the thermostat and look for the reason you have lack of flow
the motor and heat exchanger will have antifreeze, the raw water loop is the inlet strainer, the raw water pump, the raw water side of the heat exchanger, and then it discharges into exhaust
have you gone thru the TB5 troubleshooting tree?
link #21 in the stickies. https://forums.iboats.com/threads/must-have-technical-information-for-diyers.335378/
start there.
is your TB5 trigger a 2-wire, or a 3-wire "sensor" assembly? if it is the older 2 wire, the newer 3-wire should have...