I don't have a 4 stroke but on 2 strokers that is the "exhaust relief" port. It allows exhaust gasses a low resistance path to escape when the prop exhaust is submerged. So, to have water exit is normal. However Steam means your internal water temp is excessive. Your tell tale stream seems to be reasonable. I notice that you are in a barrel. Did you check the temperature of the water in the barrel? Going to bet your water is extremely hot and when added to the engine heat removed may be adequate to cause you to generate steam.
When I ran in a barrel for any length of time I kept the hose in the barrel keeping fresh/cool water for the engine's water pump to pickup and feed to the block.
Next thing is once you get that looked at, it wouldn't hurt to change your impeller in your water pump and your thermostat. Sitting for long periods are bad on the rubber impeller as it takes a "set" and in the eccentric operation of the pump, when the blades are supposed to expand to follow the expansion part of the eccentric, they can't and you loose water pressure as a result.b
If you don't have a manual on how to do that, iboats sells parts and manuals/access to manuals. Check Boat Parts and Accessories above for both.
Come back with how things are going/went.