I started out with a setup much like what you have there. Set the outdrive up for surface drive. That is when the boat is on plane, ~1/2 the prop is in the water. This means that the prop shaft exits the hull right at the bottom of the "V" in the transom, not under the hull. Since you are using an air cooled engine, keep it that way. The trouble of converting it to water cooling is not worth the effort. It can be done but no gains are realized on a Homelite conversion.
BTW keep the flex shaft from the trimmer if tyou still have it. The prop shaft looks to be 1/4" so adapters are readily available form parts houses to make the connection from the flex to the prop shaft. The bonus is that the square end of the flex shaft is the way it originally connected to the engine in the trimmer. Just create the stuffing tube to contain the flex from K&S brass tubing stock and your there! Check out radio boxes for your electronics from the same parts houses. I like the ones at http://www.eellspdx.com/
they work wellin deep Vee hulls, are quality and inexpensive.
Check out Marine Specialties http://www.marinespecialties-rc.com/hullprice.htm
for other goodies like the adapters..