The brown wire is usually the Over Temp sense since the sensor is buried in the water jacket cover right where you are pointing. It supplies a ground when experiencing temps in the 195F range to the warning horn located in your control box or close to it. Thermostats usually run between 125-143F on opening temp so there is lots of room for engine temp to increase before you hit the alarm.
The unpainted metal plate I see in the picture is a heat sink. You might get some "white thermal grease" just ask the www for it, and rub some between (under) your capacitor discharge modules and the plate....just improves the conduction between the two parts and on a plate looking like that I would do it if mine.
The shavings could just be starter brush residue. Starters run about a hundred bucks, available numerous places if worried about it. If replacing the starter, I'd replace the starting solenoid too as if the starter is worn enough to fail to start, the solenoid copper contacts surely are pitted well beyond reliable.
Impeller is usually all that needs to be replaced in the water pump. Only reason to replace the (pricy...opinion) top and bottom would be scoring in the surfaces touched by the impeller. Also, as part of the lower section are the upper crankshaft seals. If your LU isn't leaking might not have to worry about that.
LU oil replacement is a good idea. Drain plug on the bottom, engine vertical, pull the drain plug. Up on the right (Starboard) side of the engine above the AV plate...fat plate above the prop....will be a screw or two just like the drain plug...remove.
Using Mercury/Quicksilver Premium LU oil in the 1 quart container with hose and adapter plug to fit in the drain hole and pump to pump the oil (in the Sporting Goods section of wallyworld...where you bought your TX-W3 oil for your powerheat lube..used with your fuel in the 2 stroke application) attach the fitting to the drain hole, pump till bubble-less oil comes out the vent hole(s) and they plug the vent(s).
Remove the pump adapter and plug the drain. Some drain plugs have a magnet and it is ok to have a fine metallic film on that plug...that's it's purpose...metallic chips spell trouble. Oil coming out needs to be blue-black to black....any yellowing indicates a leaking LU seal.....there are about 5-6 sources for that.
On replacing fuel lines, super idea along with a new fuel filter and carburetor kits for the carbs and fuel pump kit since the diaphragm gets stiff over time. Going outside the engine, replace the engine to fuel tank hose and squeeze bulb too.....a little pricy these days since the EPA decided how fuel hoses were to be built.
In all what I said you haven't been out any money to speak of and the performance improvement could well make that hundred bucks or so be a pleasant memory.
