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Is the cable and shift assembly at the drive moving with the helm controls? Yes or No
If Yes, your issue is in the drive transmission (upper gear box)
If No, you have a control or cable issue
Get the right hose for below the water line.
That is bilge pump hose that you bought, which is OK to use above the water line.
FYI, the good stuff is about 4x the cost of the stuff you bought
Then dig out the Bondo, take some resin/microspheres/cabosil and mix up some marine fairing, or buy pre-mixed.
I would roll on gel, then 2 layers of barrier coat and 4 layers of ablative bottom paint
In this day of $5000 helm seats with heating and cooling, $3000 T-top mounted air conditioning for the driver, $500 cooled drink holders, $2500 on-board ice machines on the $300k 28 foot fishing boat.
What is $5k for a prop
Trace the grey wire from the ignition coil to the tach. trace the tan wire from your temp gauge to the sender
make sure ground wire on both gauges has continuity to ground. Make sure purple wire on both gauges has battery voltage when the key is on
If grounding the tan wire makes your temp...
Get a different boat.
To surf, you need either an inboard or forward drive for safety reasons
A sterndrive will simply grind your kits up when they wipe out forward and fall into the prop
Bondo is talc based and while it could be used on interior cabin, do not use it on the hull.
Use proper fairing compound.
However a 55 year old boat may need more than cosmetic work