Uh, is this normal? - '90 8hp Mercury

So I did a bit of work to my Merc, and tested it this morning. Took a couple of pulls to wake it up from the winter, but runs like it did last year, fantastic.

I noticed a few things that seem a bit weird and wanted to check with the TinBoats sages. Pictures are included, apologies for the phone-camera quality.

So here's the motor on the stand.



Here's the pic of what my first question is. Just behind that lower steering bracket is a hole; there's one on both sides. When the motor is running, water is spitting out and exhaust is coming out as well. Is it supposed to be doing that? I haven't noticed this before when the motor is on the boat, that hole being under water.



Next pic and question, where the gear case meets the 'leg'. Is that stream of water supposed to be coming out like that?



The motor pumps water like no tomorrow, so I assume the pump is fine.

Much ado about nothing?

Yes, and yes.
You do not have the engine anywhere deep enough in the water. If you had a marginal pump it probably would not have primed. Apparently you have a pretty darned good pump!!
Idle exhaust reliefs and water drains are necessary. Your drains keep the areas that would normally trap water from freezing and cracking

Thanks very much.

I figured it might be a simple reason, just wanted to make sure I didn't have a seal out or something.