First - welcome. Prepare for an addiction to speed and water!
Drive: You have two choices really, and you need to decide before building which route you are taking.
1. Surface drive - used on offshore boats often, the prop actually runs half in and half out of the water.
2. Submerged drive - the prop runs on a shaft (like yours) beneath the boat.
Surface drive is generally regarded as being faster, submerged provides a boat that is more manouverable. Generally.
3. Cooling - in the dim and distant past I have managed to get some copper wrapped around the cylinder of an aero engine. It worked fairly well. To be successful, find something a little less diameter than your engine. (Like a battery maybe, or some steel pipe - whatever). Seal one end of the copper tube. Then- fill it with salt. Honest. When filled, seal the other open end. Bend the pipe gently around your former. The salt stops the pipe collapsing. Silver sand is the age old stuff to fill the tube with - bet you have none, but can almost guarantee you have granular salt in the house.
When complete - cut the ends and get your salt out. This takes more time than bending it! Then it should be a snug fit onto the cylinder and a jubilee clip should hold it snug in place. Might be able to run some on the pipe as well if you want.
4. Fit the radio gear into a box inside the hull, typically people use electical boxes, they have seals on the top or you can buy proprietry radio boxes. Can't see inside your hull, but you might be able to build a radio compartment into the rear of the boat.
5. The servos need to go into the box you fit above. If not they will fail.
6. The shaft you have will not take water on, the drive end of it will be above or close to water line. Flexible shafts used on surface drives do take some water on, but not when the boat is moving. Keep it moving!!
7. Surface drive, as touched on, the drive shaft is flexible and comes out of the transom of the boat at the "point" of the vee. Roughly. Then the drive strut etc is bolted through doublers onto the transom. As does the rudder. Unless you go with submerged drive where the rudder is also under the boat and in the prop wash. That is why they turn quicker.
8. Couplings are pretty much down to preference. I use the polish type on my sub surface drive boat "
http://www.czarnecki.pl/fsr/index.htm" the coupling is 14 items down the page. It's personal preference and the stuff sold by Dave Marles is all very good quality. And works.
9. Your engine position is going to be determined by prop shaft length if you stay with submerged drive on this one. The boat destructions should detail where the prop and rudder need to be, then naturally the engine is going to be that much further forward than the screw.
I can give you some copper pipe to wrap round your engine as a cooling coil if you want to PM me an address.
A couple of other things to bear in mind early:
Need some flotation in the boat for when it turns over.
Everything is going to need to be well washed off and protected on completion of running in salt water.
Come back for more advice as often as you need, will try to help where I can as will the other guys. Out of interest, do you have a name for the hull. (IE mirage or anything similar?)
Glenn