What's the Theory Behind Increasing Setback?
 

Is increasing the setback mainly to move the CG rearward to get the bow up, or is it for increasing the moment arm with drive trim, or something else?

Michael

Increase the moment arm, and get the prop in cleaner water so you can run a higher X dimension or get less slip.

Thats it...more leverage, higher x (less drag) and cleaner water, but there is another factor, too.
As a hull goes faster, its wetted area gets shorter, as it rises higher out of the water (more speed, more lift). The point at which the wetted area starts moves further and further back, although the centre of gravity stay in the same place. This causes the hull to run flatter on the water surface which in turn reduces the lift and creates more friction (as the wetted surface is enlarged).

By moving the propeller further away from the transom and a little higher, it not only provides more leverage to keep the bow raised ( and the hull at the most efficient angle of incidence to the water, around 4-6°) but also gives the boat a larger stance to stabilize it, rather in the same way that a stepped hull does.

Finding this balance of centre of gravity , height of drive, and a propeller with the right qualities is what makes a hull with an extension box profit. Some hulls and power combinations work, others don´t.

Obviously if a hull is not running at a speed where the relationship between centre of gravity and wetted area is imbalanced, there won´t be any speed to gain.

I´m only scratching the surface here, and I don´t pretend to know all that it takes to make a 24° Vee hull run fast, but I´m learning................

Wild Card:

Seems to me you have a pretty good grasp of the situation!
Bravo!

I am having trouble picturing cleaner water from a boat going say 70 mph, and the drive only a few inches back from the original position. If I look back, I see churned up water a hundred feet back or more. What am I missing here?

Michael

Yes but if you also look back there is a cavity created in he water behind the boat that fills in quite quickly after the boat passes. By moving the prop further back you are allowing more water to fill the cavity back in and the water is "thicker" . What you see a hundred feet back is only on the surface of the water and doesn't effect the prop.

yup, 10" back on an outboard does wonders.