Use a pair of magnets (one on the inside of the hull and one on the outside) to locate your pilot hole position. This takes all the guess work out. Check it numerous times for obstructions and for a flat surface (inside and out) larger than the diameter of the largest point of the paddlewheel. Make sure there is nothing in front of it that would obstruct or create turbulence over the water flow that goes to the paddlewheel. Tape area around outside magnet (where you are going to drill) with painters tape. As mentioned earlier, drill in reverse with a hole saw until you are through the gelcoat, then go to forward. Be sure your hole is big enough. If you are a bit small, it is a PITA to grind it out. Chamford the edges of the hole/gelcoat with a grinding attachment and dremel a bit to help avoid spider cracking (should not be a problem, but it's good insurance).
I'm not familiar with your hull. That is a direct drive, yes? Generally with a DD, I would locate it in the engine compartment, usually toward the front of the compartment.
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