Re: mercury lower end. do you lube the outside of the "drive shaft"?
Mercury Anti-Corrosion Grease is sticky as all get-out and works well for coating parts with a tendency to rust, such as driveshafts, etc.
http://www.iboats.com/Mercury-Marine-Anti-Corrosion-Grease/dm/view_id.39258
Scaaty, that driveshaft doesn't look like it's stainless. Some of the older Mercs had a mild steel driveshaft with stainless cladding in the water pump/seal area. So if yours is like that, yeah it's gonna show some rust after use in salt water.
At any rate, it's certainly not gonna hurt anything to coat the driveshaft, especially a non-stainless one. Say "Hi" to the Doc when you next see him, I've got to get down his way soon for a visit, if he's feeling up to it.
On the grinding in reverse, note that since the lower unit uses a "dog clutch", you can't "ease" into gear, it's got to be a quick "snap" motion or she'll grind. It's also possible there's an adjustment issue with the shift cable. If reverse is working OK once you've got it shifted, the lower unit is probably OK. Worn driveshaft splines won't cause that sort of grinding. If they were worn bad enough to cause a problem, the crank and driveshaft splines would be stripped out and you'd be going nowhere!
Impeller life can vary and replacement once a year isn't all that unusual, especially if you're running in silty/sandy water. Better safe than losing your expensive powerhead. Be sure the stainless steel insert (cup) in the pump body is smooth (no scoring) and has no dents that could wear your impeller out prematurely. Also carefully check the stainless pump plate and renew if it's scored or dented.
One other thing I've seen on plastic pump bodies, folks will run the motor dry which builds up a ton of heat and can melt the plastic, sending molten material down into the rubber impeller. This material hardens then chews up what's left of the rubber, in short order.
If your pump housing looks like it's been overheated or you have chunks of plastic hanging down in your pump insert, that's not normal! Best to replace the housing. Never ever start the motor out of the water, even for an instant, since this will severely shorten impeller life.
HTH & Happy Boating.........ed