The fuel smell in the bilge is totally normal. (assuming there isn't a puddle of gas in the bottom) This is EXACTLY why there is a bilge fan. You need to run that for a minute or so, to draw in fresh air before starting the engine. Bilge explosions do happen. Not to mention... if you look around this section... you will find threads about guys who have hard re-starts when warm. Basically... they don't run the fan, and the bilge doesn't have enough air to let the engine run. (so, normal)
With the Merc's... unless you have a hose, with a lot of flow... and a lot of pressure... you won't push enough water into the engine to get it out the bypass. AND... since you aren't getting water out of that pee hole... you really don't have enough water to cool the engine. SO... DO NOT run the engine long on the hose.
Basically... the flush port is in the base of the engine, just above the feed hose from the jet pump. SO... a lot of the water from your garden hose will come out the feed line. I know it's kind of stupid... but it's to "Back Flush" the feed, and to push out any thing, like chopped up grass, that you may have shoved in there while out riding. I've personally thought about adding a second flushing fitting to the top of the heads. That way, the garden hose water will fill the block, and will let you keep the engine cool while on the trailer.
FYI... if you continue to run it on the hose... your temp alarm will kick on.
On that note... make sure BOTH of your buzzers work. The one mounted in the hull is the seadoo buzzer... but there is a second buzzer that it taped on the wiring harness, near the key... and it's for important things, like the over temp.