I'm going to toss in some thoughts:
GM is right on with the water pickup. Most water pumps are physically located right above where the lower unit casting mates with the mid section casting....easy enough to identify that.
At low speeds, when no ram water is present to supplement the water pump centrifugal pump's lifting action, you need to have the water level even with or above the pump for adequate pickup.
Setback on Bass Boats makes for better stability and less boat in the water (mph killing drag) when on "the pad" at high speeds. There is a number around here that is used for that "setup". I forget what it is. Looking up old posts from Walleyehed, or DHadley to name a couple or Silvertip, Steelspike for another couple should produce the number; again for bass boat running.
Best I can recall the number is 1" lift required on the engine for every 6" back. That means if you take a yardstick and extend it from the bottom of the boat, your AV plate is probably slightly below the ruler....amount depends on your boat's designer. On a Bass Boat, the AV plate is usually at the hull bottom so the number raises your AV plate 1" per 6" above the ruler. On your boat it would be trial and error.
Installation of a water pressure gauge would be to your advantage. Tapping a ⅛" port in the rear of your water jacket covering the rear of the block (between and to the side of the spark plugs, half way to the edge) is where I had mine, if a plug isn't already there....on larger engines there is usually a plug installed by the OEM so the hole is already there ready for the hose barb and hose to your instrument. That way you would know, not guess, if your engine was getting cooled.....numbers are around here as they have been posted numerous times....like a couple of # at idle and I think 10# is the most I have seen at WOT.
Since your engine isn't big enough to set up your boat like Bass Boats on the pad, you will have ventilating problems (prop sucking air, rpms increase and speed decreases) when on plane and the faster you go, the more of a problem it becomes. What you really need is a movable jack plate, SORTA like is had with a trolling motor whereby you can raise your engine for shallow running and lower it for planing.
If you had trim and tilt, you could just tilt your engine up for shallow running and tuck it back down for normal planing.
Good luck.