1 point ~4%

If you upgrade the cam, you absolutely must upgrade the valve springs and go to roller rockers.
even if you don't upgrade the cam, I would still replace the valve springs.

I honestly think that your given your parameters of salt water, family boat, good gas may be hard to find, need reliability, etc. I'd just shave the head a smidge, use some thinner head gaskets, freshen the rings and bearings, and call it good. I don't know if that version has the junk valve springs or not, but the valve train is usually the weak link on merc motors.

If you start adding much power then you have to upgrade the oil system, upgrade coolers, modify the fuel supply, etc. and before you know it you're another $2k into just parts for re-rigging to handle a few extra horses. The 731 cam is right on the limit of using the stock valve train but if you don't want to spend on a full valve train use what you have and enjoy the next ten years trouble free.

But while you have it apart I'd remove the bypass valves in the oil pad mount to increase oil flow. Plenty of threads here on that one.

Valve springs. Anybody who has stock GM valve springs and runs above 4600 RPM needs to replace them.

THe number one biggest thing to a budget improvement you are going to run into is....

Drum roll please...

It goes like this... "well its not that much more to.." Then you discover that since you did that, you should then do.... which leads to needing to do, which causes you to have to......

Then the next thing you know your 450-500 hp build is looking more like 600+ and your 5000 budget is phucked....

Point taken on the valve springs. I'll be sure to upgrade them. With that said can I use this 731 cam with my remaining valve train components? I'm going to get roller rockers and switch to adjustable rocker studs too. Are there any roller rockers that will fit under the factory valve covers? I think I'm gunna stick with the 8.6cr flat tops since they are perfect and forged (and free). Maybe a .030" mill?

Crane Golds will fit under the stock valve covers. Others may fit as well.
You just have to grind off the drip tabs on the underside of the valve covers.

I'd mill the heads .020 and use a .030 head gasket

Going with .020 rather than .030 is better because of intake manifold alignment?
And will I be truly disappointed with the 750cfm Edelbrock carb? Max rpm is going to be under 6000.
I could also use help choosing the correct valve springs for the 731 cam.
BTW I thank you guys so much for helping me with all this advice.

When I swapped in a 731 in my 525sc, I used the Crane recommended springs.
Comp 929's or Isky 9005's would be fine too.

Yes on the .020 for intake alignment purposes.

last year I found a fact GM gen 5-6 head gasket that was .027 composite and inexpensive. can't find it now. anybody got a part number? Found it. 14097000. 25 to 28 bucks.