Re: internal cooling or not?
You are correct. A 'raw water cooled' engine takes water from wherever the boat is floating (lake, river, ocean) and pumps it directly through the engine, and into the exhaust pipes, where it is sent back overboard. Advantages - cheap, (that's about it). A raw water cooled engine will typically be stet up with a 140? thermostat (well below the optimum operating temp for an engine) because if the boat ever sees salt water, the salt will percipitate out of the water at the proper operating temps of 180? - 190?, and fill & plug up the cooling passages in the engine. A raw water cooled engine can not have antifreeze (w/ associated rust inhibitors) running through it, so the life of a raw water cooled engine can be quite short (in bad cases as short as 5 - 7 years in salt water environments).
In a 'fresh water cooled' engine (closed loop system) the engine is cooled by a closed loop of cooling water (usually with antifreeze) - like in your car. After the closed loop cooling water goes though & cools the engine it then passes through a heat exchanger (think car radiator, except there is water & not air passing through the outside) to cool off, and then back through the engine again. This type of system requires two water pumps, one for the closed 'fresh water' side, and one for the raw water side. Advantages - you can run a 180? - 190? thermostate and run the engine at the proper temperature. Engine life is GREATLY extended, basically to an unlimited life if maintained. - Consider this a pretty big positive feature if you are planning on owning the boat for a number of years - it will also add to resale value when you sell.