RE: Water Pick-Up or Water Pump?
A motor must reach a certain temperature in order to run properly, the garden hose may have been too much.
The position of the waterpickup seems in order, the water flow is only minimaly disturbed by the round edge of the transom.
Don't make it stick out anymore, you'll only add extra drag!
If you're not satisfied with the amount of flow, put a pickup tube in the propspray, behind/over the prop, waterflow guaranteed.
Regards, Jan.