I have long been of the opinion that all cast iron auto-derived inboard gas engines should have at least a half closed cooling system, for the block. Reasons:
1) these engines were designed by GM, Ford or Chrysler to have pressurized cooling systems with antifreeze and corrosion inhibitors
2) pressurized systems allow the engine temp to be closer to the design temp, which promotes longer life and better efficiency, running a GM inboard at 140 degrees is not efficient, nor does it do much for oil dilution by water or fuel
3) the nearly complete elimination of corrosion in the water passages
4) Longer engine life especially in salt water regions, due to better cooling, raw water cooling is inefficient, it allows localized boiling if the water gets over 180*F, which is bad for the cylinder heads
5) far easier to winterize, you can actually hook up the winterizing tank and a bilge pump or live well pump to the tank and then to the muffs for the outdrive or water intake and winterize it far easier than crawling around in the bilge to pull those dang plugs & then rod them out when they get clogged, this method is very risky on raw water cooled engines unless the block is drained first or the 'stat is removed
6) no debris building up inside engine to cause localized overheating and clog the drains!
If I were to re-power this boat, two things it MUST have are a remote oil filter mount and closed cooling. Not as good as an outboard, but acceptable. I would still have to deal with the outdrive in salt water though.