What did the inner side of the transom skin look like? Most of these boats have corrosion, in fact I've not seen any that didn't have pitting that needed repaired after the corrosion is removed. It's almost impossible to do a good cleaning job with the splashwell still in the boat.
Dang I woulda killed for those flip down seats when I was doing the stern seating in my SS.
Seeing all the dark black soggy rotten wood you had there will probably be more corrosion and pitting than you think. After cleaning it's a good idea to fill the pitting, prime and paint the inner skin to keep it from happening again.
The transom cap, yours doesn't look like it's all that bad to me, just maybe where the motor sat, is it cracked or broken? There are a couple options out there for creating a new cap but I'll have to dig around to find the threads.
My SS had no black rotten soggy wood in it, it was all dry rot and this is what my transom looked like after I cleaned that white corrosion off and before I filled the pitting.
What did you use to clean the white corrosion off? I don't think I can get any tools in there (wire wheel, etc.) Thus, I'm looking at cleaning it with some sort of chemical/cleaner...
Remove the splashwell, most of us have. Many times when the boat has been used with a rotten transom not just the splashwell cracks but the knee brace as well so inspect it closely.
I used a fine wire wheel on a large drill with a side handle and cleaning vinegar to remove corrosion. Corrosion is alkaline and the acid helps to neutralize it. Some guys have used POR15 metal prep too.
what do you fill the pitted spots with ?