Just a guess, but is the OP's boat about 15 years old? If so, it's a modern boat with some real market value. IF.... you start doing obvious kluges like spraying paint over failing insulation, this will potentially come back to haunt you when you sell it someday. Far better to make an annual (winter?) project out of this problem. Move the engine out, typically into the cabin for a month or two. Clean up the whole engine compartment. scrape out the old foam and glue residue. Install new foil-surfaced engine/sound-deadening foam and seal all the edges with silver mylar tape. Use mechanical fastenings to secure it firmly for another 50 years. Use this project as an opportunity to upgrade any hoses, wiring, etc, etc around the engine. And, clean up the engine itself and do any servicing that is easy when it's out of its cave.
I did this for our '88 boat, in 2018. Also... Decided to install a new Betamarine25, while I was at it.... MUCH quieter now, with a current-tech drive train. I reformatted the fuel delivery system, and upgraded all the wiring in that area. New exhaust system, and vent system, Hobbs meter, and new Halon warning light, also.
Strictly IMHO, you have a "right sized" boat for long term ownership and enjoyment. Better to make it even better while maintaining/improving both its value for your own enjoyment and hedging against a potential loss of value in the future if you decide to sell.
If you want a link to my blog entries showing this project, please let me know. While a larger project like this is 'work' it's very satisfying work.
Good luck!