I'm running merc silent choice and my tips are above the waterline at idle. When i switch the exhaust to thru prop it gets a little quiter but it still seems to let a good bit of noise and water pass thru the transom. I know it's not a perfect seal but was wondering if the flaps in the diverters have any adjustment to maybe close it up a little better.

I used to run Rex Marine cutouts and they behaved exactly as you described, so it's normal. At speed or on plane it will be a little quieter as more exhaust is drawn out the prop but there will still be a bunch of water flowing out the pipes. For my old (stock) motor they made zero performance difference.

Look at the flaps. Mine were rotted away on the edge towards flow. They were adjustable too. To make sure they opened fully/not too far.

I'm not completely familiar with the Merc system, but the Rex Marine system did have an adjustment but once set, never had to be touched again. The butterflies were stainless and didn't wear out. There was a gap of maybe an 1/8" around the perimeter allowing some noise/exhaust and water out in the closed position.

I have the original merc silent choice system with the air operated acccuators. There is an adjustment on the accuator stem. I've had a problem with one not closing all the way causing an exhaust noise . After adjusting it several times I ended up replacing the metal flap inside.Now it seems to be quiet.

lift up the outside rubber exhaust flaps and take a look inside with a flashlight, I actually had the stainless inner diverters missing on two of my four exhausts. I assume the vibration loosens the two screws and they blow out. Replaced with loctite on screws and no more problems.

Also have had a bad solenoid connection in the past....cleaned terminals and connections...started working again.