It shouldn't squirt...
Not a stupid question...apparently I just missed it. The cap isn't the valve...the valve is in the cap. The cap should not be loose...it's threaded to allow it to be removed so you can clean the valve. If it squirts when the cap is tight, the valve needs cleaning, or may have failed. It may or may not be the source of your odor when the head is flushed. If it doesn't go away when you tighten the cap, it's most likely from the head intake. If you only have odor for the first couple of flushes after the boat has been sitting, it's caused by stagant sea water that's been sitting in the head intake...if it doesn't go away after a couple of flushes, you may have sucked in some sea life--animal or vegetable--that's gotten trapped in in the intake or rim of the bowl.