I was wondering if a stock 350 magnums ignition is any good for an upgraded engine? the engine is a 87

It probably has a points type ignition and should be upgraded if you do performance upgrades. Not really sure what ignition it has though, so you need to find out first.

What woudl I need to look at to know exactly what one it is?
I think I got the thunderbolt breakerless ignition. im not sure if they all have what looks like an ignition box on the top but mine does

the magnum came with a thunderbolt IV hei ignition in 87 according to the merc repair manual yours should have that

im looking at the manual too I got the clymer one. I know its not an HEI coil and my book does show an HEI on any of the igniitons.
If it is the thunderbolt would it be fine for an engine upgrade?

I'm looking at the actual merc manual the distibutor cap should have 4 screws holding it down the only other factory option was a mallory points style that came on some big blocks and the mie 5.7 ski engine not the magnum

that boat has thunderbolt 4 ignition its perfectly fine its been there for almost 23 years only thing that ever goes bad is the sensor in the dist. i always keep a spare in my boat

Should I up grade the ignition if I do an engine?

I wouldn't I had a friend try a msd 6 and a different dist on his boat and when he modified his engines and could never get it to work right so went back to the thunderbolt and it's been perfect since

If its got a TB IV then it does not need upgraded and will work with performance upgrades just fine. You may just want to switch the ignition module to change the advance curve.