Low compression could be the result of bad head gasket(s) or worn or stuck rings (and probably a couple other issues, but those would be the most common).
Since the boat is a 1996 (assume the engine is as well), the less than 100 hours use in the last 15 years tells me that it sits idle most of it's life. Sitting takes its toll as well, so regardless of how many "actual" hours you have on the engine, you can kinda figure 100 hours of "wear" for every year that it is old - so your's has used up about 1100 hours of it's lifespan (which in general is somewhere between 800-1200 hours) and Jet's generally have a shorter lifespan than regular outboards - they squeeze more horses out of smaller engines which puts added stress on all the parts.
So, despite the low usage, I am not surprised by the "low compression" - motors really fall into the "use it or lose it catagory".
If it's just a dried up gasket or two, the labour will be minimal, ditto the parts costs.
If the rings are tired (rusted from non-use, despite winterization last year - was it winterized "every" year?), you can be looking at dropping upwards of a couple of grand to have a shop haul out the engine, tear it down, fix what needs fixin and then putting it all back together (which is still less than 20% of the cost of a new motor - and until you have it apart it's difficult to predict how much needs to be done).
Did the "mechanic" happen to tell you what the compression numbers were?
Merc doesn't specify an exact compression number for most of the motors, but you generally would be looking for something north of 100 psi (110-120 range would be fine) with no more than a 15 psi variance between the 4 cylinders.
However, if this is a "toy" that you really don't use, you may want to part company with it "as is". You could end up spending more trying to fix it than it would be worth if you did try and sell it after making the repairs.
