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First off, that’s a beautiful motor, great shape, congratulations on getting such a nice looking low hour motor.
Secondly, that gray foamy emulsion is somewhat normal on a lot of these older OMC motors. This subject comes up a lot on the AOMCI website:
https://www.aomci.org/forums/topic/gray-foam-lots-from-exhaust-outlet-1957-evinrude-10hp/
https://www.aomci.org/forums/topic/what-causes-this-grey-emulsion/
Here are a few comments from various ones, mostly Frank R.
Dark or milky oily exhaust housing emulsification after running the motor. It is oil and gas and exhaust mixed with cooling water in the exhaust housing and then drains through relief holes. Other than making a mess, it is normal with these motors.
It’s the unburnt fuel/oil mixed with water in the exhaust housing. The motor might be running a little rich, the carb needles might need to be leaned in a little, oil to gas ratio might be slightly high, use synthetic 2 stroke oil, try new plugs or next heat range higher, on motors with a thermostat be sure that is working properly. If the thermostat is stuck open the motor runs too cool..a hotter running motor will burn off fuel mixture better.
Even after all that you may still get some of that emulsion.
Other than making a mess, the leaks you mention are not a concern.
That milk shake is perfectly normal. It is the oil that you put in the gas. It has gone through the engine and done it’s job. From there, it goes out the exhaust and emulsifies with the cooling water that has also done it’s job. If the conditions are favorable (or unfavorable), it forms that foamy goo. Otherwise, it just goes on out unseen (except for a sheen on the water that also drives some people nuts).