Yes, the camshaft sprocket will index to the cam in one position only. The crankshft spocket will also index to the crankshaft in one position only.
There will be markings on each sprocket, that when aligned (as you're installing the cam sprocket), will phase the camshaft to the crankshaft.
See your OEM Mercruiser Service manual for the instructions.
This is an example only for a Dodge engine, but most markings are very similar.
When you install the new ignition distributor, bring the crankshaft around to #1 TDC on the Compression Stroke.
Drop the distributor in, phasing it so that the rotor is physically aiming towards #1 cylinder. (not mandatory..... but most do it this way)
If the cap is marked as to #1, 2, 3 and 4, then align the rotor as to correspond with the #1 on the cap.
BTW, here are two alternatives to the OEM charging system, should your end up failing.
These are sold in kit form.
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