Welcome JBD319 to the forum. Sorry for the delay in responding. I have a 1986 CVX18 also. It came with a blown SBC (rod thru the oil pan, not supercharged) which I replaced with a 351 Ford. I'll try to answer your questions the best I can although I'm no help with the prop.
On my '86 CVX 18 along with replacing the engine I swapped a 4bbl for the stock 2bbl using the stock cast iron manifold with good results although I did not compare before and after. As for the heads they are different. Unless a previous owner modified the engine you would have 302 heads. The 351 heads have bigger valves and a bigger combustion chamber. 302 heads have 7/16in. bolts and the 351 has 1/2 in. head bolts. Other than that you could use 351 heads as there are stepped bolts and collars for that purpose. With the bigger chambers you may lose a point of compression ratio. The firing orders are also different. The distributor rotates counter clockwise.
302 is 1-5-4-2-6-3-7-8
351 and 302 HO is 1-3-7-2-6-5-4-8
I also converted to thru hull exhaust. You will have to get creative on this conversion if you want center riser exhaust as Mercruiser only offered log style manifolds when they used Ford engines. I originally used Volvo Penta manifolds and center risers from a '95 351. I had a '80 CVX 18 project with the low engine cover like you have but the Volvo Penta risers were to tall to fit without modifying the cover. That project stalled as I got the '86 CVX18 and used the 351 and Volvo Penta exhaust on that. The '86 CVX's had a taller engine cover but even with that I had to raise the front of the cover several inches to clear the risers.
I did some work on a Glastron Bal Harbor (228 305) which included adding thu hull exhaust. As a cheaper solution we used the original stock log manifolds and risers from an inboard application as they exited straight out as opposed to 90 degrees downward in a sterndrive application.
Finally this June I needed to replace my exhaust as time and rust caught up with it. I went with Barr's center riser manifolds for a 351 Indmar application.
The risers with this package are the same as on a GM center riser and much lower than the Volvo Penta's allowing me to lower the engine cover to the stock height. This is with the taller engine cover. The height of the risers are below the spark arrester so you should be alright there. Check the dimensions for yourself.
Here are the links to what I did.
'80 CVX 18 low cover and Volvo Penta exhaust
http://forum.cgoamn.com/index.php?topic=6506.msg94563#msg94563 '86 CVX Exhaust with Indmar manifolds.
http://forum.cgoamn.com/index.php?topic=9122.0 Summary
Of the 3 solutions here I would not go with the Volvo Penta as the risers are too high and would require much modification of the stock engine cover. Also I was lucky enough to find these manifold used with only 125 hrs. on them and only some surface rust, I did get 3 seasons use from them.
I also would not do the inboard risers. If you have log risers they probably way past time for replacement. No use tempting fate with water injection to the engine .
My suggestion is to use the 351 Indmar manifold and risers. This gives you a solid foundation for the rest of the exhaust.
They should work even with the low engine cover but measure for yourself. I went with Moore performance Thu Hull exhaust with the muffled tips. They give a good tone yet are quiet enough to permit conversation. Barr Manifold part# FM183, Riser part # 20 0100
Links to suppliers
Barr Exhaust
http://www.barrmarine.net/indmar.htmlMoore Thru Hull
http://www.mooreperformance.info/Thrutransomexhaustparts.htmlHope this helps.
Glastronjohn