To give you a relative idea, if you have a splined prop shaft (I did on my '72 125 Johnny) the prop needs to be tight, somewhere around 50 ft-lbs...don't have the spec but my 90 Merc torqued to 55. Slop in the prop will cause unnecessary noise and wear of the drive components.
Also, if the prop shaft and thrust washer are tapered, ensure that the slopes of the tapers are lined up. Then once you install your spacer and the prop, the prop shaft protruding out behind the prop hub will only be threads. If any smooth space, you still aren't setup right.
Answering your question as to the function of the thrust washer, it's to contain the thrust of the prop. If it weren't for that your prop would move up and into your gearbox tearing thins up when in F gear.
Mark