Re: 1980 Mercury 7.5 Cooling Circuit Issues
No, it's not normal. It's an indication of lack of cooling water, so don't run it anymore until you replace the impeller. Overheating is very bad on 2-strokes and it doesn't take many times before the rings/pistons are 'fried' or worse.
There is one nut in the front, and one nut from underneath, to pull the lower unit down. Then (2) nuts hold on the upper water pump body. You'll probably find that the impeller blades are all curled up and have lost their flexibility (and along with it, the ability to pump water).
If the impeller won't come out (very likely), you'll have to split the brass insert of the impeller with a chisel or sharpened screwdriver (my favorite 'cause it's very thin and gets right in there). Be sure to watch out for the impeller key and if it's damaged, replace it along with the impeller.
There's a section in the Repair Forums regarding resurrecting old motors, find the article on impeller replacement and that should help quite a bit.
BTW while the lower unit is off, you'll be able to see the brass water tube which goes to the upper end. Blow air thru this tube and/or run water up the tube to check the rest of the cooling system for any blockages. If air/water flows freely thru the water tube, likely the impeller replacement will resolve your cooling problem.
The idle problem could be related to lack of cooling, it could also be just a lean idle mixture. These motors are quite touchy to carb adjustments, try turning the idle mixture needle CCW approx 1/8 turn and see if it runs better. if this adjustment doesn't help, you may have 'trash' in the carb, which would require you to remove/disassemble/clean it.
HTH & G'luck...........ed