I changed to dripless PSS about 6 years ago and have been satisfied. Although, I've had the shaft uncoupled twice since I put it on and both times, I'm sure the set screws were never changed out like it was supposed to be. Since the last time it was uncoupled 2 years ago, I get a little water leakage when under load. If I motor for 1/2 hour, I get about 1/2" of water in the bilge. At rest it doesn't leak any at all. It has been annoying, so I dry my bilge every time I leave the boat and come back to find it dry, so at least I know it doesn't leak except when motoring. But it probably also leaks when sailing, too, as the shaft is spinning. Anyway, I'm changing the bellows this winter as it is due. I'm satisfied, but I think it is personal preference. I guess the rationale is that it works. I guess it works about as good as a traditional stuffing box. Maybe no better, no worse. That's why they both survive. Beta vs VHF, except there is no clear winner?
Replace the shaft, for sure. It looks like it is toast. I would think that shaft replacement is a common thing in your neck of the woods. All competition ski boats run with inboard engines and coupled shafts and that's a big deal in your area, no? It's not just a sailboat thing.