My friend and I put together a couple of Magics. I don't know about your .37, but the .32SX is a great engine for the plane. He flies on a .32SX with the nelson muffler and it DOES hover well.

I have a .46 on mine. The weight vs power tradeoff is about even. My plane weighs 4 oz more than his but we both have about the same pull-up power. If your .37 compares in weight and power to the .32SX you should be fine.

-Cheech