Leaky Fishing Boat

Here are some more pics. I still have the water in it because the kids will make a mess once I let it out, waiting until later this evening to drain.

Here is a close up 

If it were mine, I'd remove that transom and start over.
 

What he said.

Yeah going to have to start looking into that. Hopefully its easier than the original plan of redoing all the rivets

If that is pressure treated, I would expect a mild to severe amount of pitting and corrosion from the electrolytic cell.  The entire aluminum panel of the stern might be weakened to the point that it would fail.  If it isn't, you may be able to get away with just welding the holes closed.

That almost certainly got sandwiched to suit the current engine, you can see where they notched around the drain plug on the outside.   It looks like that height would be about right for what's referred to as a "long" or 20" shaft outboard.   Most small tiller engines are "short" or 15" shaft length if I'm remembering correctly.

There was likely a wood block on the outside and inside at the original transom height to give the engine a spot to clamp to but not the full inside / outside set up you have there.   The outside block would probably have had angled cuts on each side towards the bottom to give it a "home plate" sort of shape but with a flat on the bottom.

I've never seen anything quite like that... Wow. Yeah, I'd ditch all the wood on there and start over. Also, depending on what the aluminium between that wood is like, don't be afraid to scrap the boat alltogether. The trailer still has a lot of value there.