Re: Motor too big.
Concerning whether you're "legal" or not; consider the following.
Fed requirements only require your boat to display the "certificate of compliance", because it's over 20 ft long. Boats under 20 ft must have the placard showing capacities, including outboard HP and the certificate of compliance.
On my boats, that certificate wording is on the capacity placard/sticker next to the helm.
NMMA member manufacturers must display a placard/sticker showing all capacities, including HP for outboard boats up to 26 ft. Inboard boats(including I/O's) don't have to show HP. My previous mention of 300 HP rating for one of my boats(the Bayliner) came from literature, not on the placard/sticker, since it's an I/O.
Not clear on what year this took effect, but I'm sure your 1994 boat qualifies.
You may be illegal in that your boat has no fed certificate of compliance(normally on that capacity placard/sticker). Water cop could ding you for that.
Your state might have additional requirement. example: all boats under 26 ft must display a placard showing all that stuff.
I suspect the previous owner removed the placard/sticker when he stuck the bigger motor on the boat so nobody would see that 175 rating on it. Trouble is he also removed the fed cert of compliance wording that was printed on that placard/sticker.
So, where does that leave you. Unless your state requires something else, your boat, being over 20 ft, only requires the fed(USCG) cert of compliance to be displayed. If inspected, you may be dinged for not having it.
If you contact your boat manufacturer, I'm sure they can provide you with a replacement sticker. These are "form letter" type things, where the actual capacity numbers (HP,people, weight)are stamped on, appropriate for that particular model. Usually, the placard/sticker is next to the helm, presumably to reminder the operator how many people he/she can carry.