The area in question is the hull to deck joint on the back or transom of the boat. In the center is boat puddy as sone would call with gel coat painted over it. What appears to be marginal, I would sand cleaning off the area, fill in with two part slow cure epoxy which is generally much stronger and I use "Water Tite". Let dry and then sand. You can come back with white gel coat and you can purchase a small repair kit in West Marine for example or simply use a spray on but do mask the area and make sure the are is lightly sanded for any paint to include gel coat to grab to.
If the center is cracked, that means the putty. Simply remove using a dremel to the fiberglass from the deck and hull flanges and again, use water tite. Simple repair to me.
When in forward or reverse and the engine houseing is too close, it will hit the lip or hull to deck joint. Some opted to put a plate but still you will damage the area. Simply adjust the pin so the motor leans back a little more or make the outboard bracket thicker where attached to the metal plates holding it on the transom. I am suggesting shimming the bracket outward.
crazy dave condon