I would skip the older Merc and get a newer (1986 and above, I think) Merc or J/E.
The Merc's (after 1986) had prop rated HP, electronic ignitions, T&T built into the transom assembly.
Other members can help you with the best year J/E motors, but I think there HP rating changed from Power head to prop about the same time as Merc's.
With the older Merc your going to need a jack plate to lift your motor, because of the external T&T cyl. and clamp system.
You want to "Think through" your steering option before you do any thing ... What system do you have now ? ... Where is the cable coming out of your splash well ? ... Where will it connect to motor if lifted with or with out a jack plate ?
NFB will work well but you can't lift motor with out mod's to your splash well.
Hydraulic will work with any thing but costs $600.
If you go with the 1978 Merc, try a Lazer II in 20P or 22P ... The 22P worked the best for my set up, out of a bunch of props I've tried.
Hard to say what will work best for your set up, but you can find Lazer's on Craigslist for $150 to $200, and would be a good starting point.