Type C was for electric shift.-----But for a few years it was used on all OMC models.----And listed on those stickers.-----Use any quality outboard gear oil in that 1968 big twin.
That would be a 90 degree crossflow.-----These motors are famous for broken piston rings.-----Do a compression test for future reference.----Post your numbers here.
Intake / bypass cover is on the starboard side.----No water there.-----You need to address this issue YESTERDAY !!----Water on the bearings will destroy the engine quickly.
Test this primer to see if is working !----Remove small hoses at the carburetors.----Fuel should come out with key pushed in and motor cranking.----Report exactly what you find.
No ----the primer valve " clicks " when it opens.----It does NOT function the same way as choke flappers.----Best learn how this primer works.----It will help you diagnose issues and boating will be more fun when you understand how things work.