Unfortunately, you'll probably need to pull that powerhead to change those gaskets. The bolts are torqued in three stages (1/3 full torque value, 2/3 full torque value, and then full torque value), at least on the older Mercs, and if it's anything like mine, you won't be able to get a torque wrench and socket in there for the bottom bolts. This applies to all covers from what I've read. You'll need to check the service manual for your year Merc to know for sure. Also, I feel your pain about the snapped head bolts. (Read my thread about gaskets and you'll see what I'm talking about.) I don't know about your year Merc, but the older ones have a head cover gasket and a water jacket cover gasket. Mine was leaking, as well, and I'll need to change those gaskets ... and drill/tap some head bolts. Oh, the joy of having an older engine.
I know, on mine, the water from the pee-hole was hot ... too hot to keep my hand in the stream. As long as the correct temp plugs are used and there isn't any pre-ignition happening, then it's probably not getting too hot. Those combustion chambers get pretty hot, and it doesn't take much to heat everything (including water that's flowing) around it. On mine, it's probably as hot as the hot water out of my hot water heater. Enough to get scalded real good.