re: "Under power water was coming out of the raw water strainer lid."
In every marine application I've seen, the raw water strainer is on the INTAKE side of the raw water pump and therefore always under suction. IF water is coming out of the top of the strainer while running, you likely have the strainer on the output (high pressure side of the pump) and you have two problems...1) leaking gasket or cracked lid if its plastic., 2) strainer incorrectly plumbed.
re: "the neck at the top of the drive had corroded through"
Stop... do not pass "GO". Fix this. likely most common (after pump impeller failure) cause of engine overheating.... also another cause of engine overheating is a vacuum leak on the lid of the raw water strainer.
Did someone replumb the raw water strainer to get rid of a stubborn vacuum leak on the raw water strainer?
re: " Salt deposits".... There is a product called "Salt-a-way", that when run through an engine while its running, will remove salt deposits. Not a perfect fix it all the time kind of thing, but works often. The on the cheap boiling in a pot solution is white vinegar. Does not really remove rust, unless its loose already.