82 mercury outboard wont go in neutral

This motor is old but doesnt have alot of hours on it. It was my uncles and well maintained. Last year the bracket that holds the starter up cracked. I had it welded back together as the brackets and head are all one part. So after i put the starter on and have everything ready to go; when I turn the key the starter bendex hits the flywheel and stops....
I know the motor is not seized because I can manually turn the flywheel. After a while i noticed the the prop is moving when I turn the flywheel....Iam assuming this means It is still in gear? So Move the throttle from reverse to forward and neutral....trying to get it in neutral. Still the prop is turning when I turn the flywheel. I am not turning the keyto start it anymore because I am afraid the welds will brake on the starter brackets, becuase when it is in gear it 1. Will not start & 2. has too much compression/resistance to let the starter turn the flywheel...am I correct?

How can I know for sure if it is not going in neutral?

Also this is a 40HP outboard Mercury, w/ cast aluminum head/motor....which is why I am affraid the welds will break on the starter
brackets, becuase there is so much compression/resistance from it being in gear.

If the propeller can be easily rotated in both directions by hand it is not in gear. If a stater interlock switch is installed and working it would prevent the starter from working at the start position in the key switch. Being in gear would not affect compression and the starter has plenty of torque to start the motor in gear. If the battery, connections, starter and wiring are in good shape I would suspect the weld job. All was working correctly until the starter bracket was welded, is that correct? If so I would suspect that the starter bracket was miss located during welding causing binding at the starter drive gear and the flywheel. ????

I think this is very helpful information, i do think the weld job is great though. It seems like the bindex comes up to the flywheel just rite.... however it has to be EXACT! Thank you for your knowledge, I thought being in gear would give the motor higher compression, and i will check to see if the prop will move in both directions freely by hand. Now I understand much more....Thank you!!