It looks like there is some kind of filler in it (the white stuff), maybe an old repair. Use some epoxy or poly and glass to fill it, sand it smooth, fill any low areas with the same type of putty. If you use poly, you can use gel coat to finish it, with epoxy you need to use paint.
Thanks ondarvr. Does the type of gelcoat matter? What type of gelcoat is recommended? I have found a polyester gelcoat that states "No air-resin solution". Will that work? <br /><br />Home depot sells a fiberglass resin, but doesn't state if it poly or epoxy. Anybody know?
Lot's of boaters on this site swear by Marine Tex, easy to use, sand and buff. Holds up well and can be color blended. I've not used it yet but plan to on some small nicks after I fix all the rot and get the motor back in. Priorities!
Oh and stop buying marine stuff at Home Chepo. You need the satisfaction of paying way too much for your repair materials . Seriously just make sure the crud you buying is rated for marine repairs and below the waterline .
The reason for glassing it is that it looks like it was repaired before, this old repair is fairly large for not using glass and is failing. If you don't keep this boat in the water for long periods of time the stuff from Home Depot will be OK, it's poly. The gel coat should work too.
. Seriously just make sure the crud you buying is rated for marine repairs and below the waterline 
