Re: What is the purpose of the foam
The foam is for upright flotation and you will or should find some under the gunwales and deck. There should also be a couple of pieces at the stern, under the floor too.
HOWEVER: The foam back by the transom is encased in a plywood box that is glassed to the floor, transom, and hull sides. On these early Glastrons, the transom plywood does NOT go full length between the sides of the hull because of the odd shape back there. The foam and box--especially the box-- reinforce the transom. Removing the foam and wood box will compromise the rigidity and integrity of the transom.
Yeah, you might be able to "get-away" with removing it, but personally, I would not do it.
That's my 1971 V153 in the avatar. With the foam in place I can fit a battery box and two six gallon tanks and it is much narrower overall than your V173 at the transom. However, I also have a V163 and it is a little smaller internally but I can still fit a built-in tank and battery.