Re: fresh water cooling
You are correct, there are 2 water circuits on a fresh water cooled boat.
The engine cooling circuit is exactly like an automobile. It uses anti-freeze and the engine water pump circulates it through the engine block.
The anti-freeze passes through a "radiator" just like a car cooling system.
On a boat this "radiator" is called a "heat exchanger". It forms part of the second cooling circuit. The raw water pump (different from the engine circulating pump) pumps sea water through the heat exchanger, which cools the anti-freeze. The hot sea water then goes out the exhaust, back into the sea.
A heat exchanger is much smaller than a car radiator (usually about 4" in diameter and 18" in length) because it's moving the engine heat from a liquid to another liquid, which is much more efficient than moving the engine heat from a liquid to air.