How much water pressure should I expect to have with a recirculating pump and a merc raw water cooled themostat housing ?
should I use a 35lb gauge or less?

You don't want much over 20lbs of pressure. I have the same set up with CMI's and have about 18lbs at wot. With the Gils I had before it was about 22lbs. on the same engine.

Anybody looking for stelling there is a set on ebay.

I Need Tail Pipes For Stellings (bravo Set Up)