water hits the cav plate and spashes back in to the boat..
I have a bud with a 15BW & 70 Yammy that experienced the same problem BUT the water was being splashed by his depthfinder's transducer mounted on the transom. You appear to have something like that on your transom. You might want to double-check the source of the spray before adjusting the engine height. FYI, my bud made a splash deflector from a piece of four inch PVC that he bonded to the hull with 3M 5200. Works great! I'll try to get a picture if you are interested.
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