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There are many different types of boat engine. Variations on the glow engine are often produced with water jackets that can be plumbed in to provide cooling. There are some other interesting types that can be fun including the putt-putt engine that was first used in tin boats.
This shows a Frog 0.249cu inch diesel engine that is water cooled.
The needle is shown separately.
Another interesting form of propulsion is the waterjet. If you are interested in the fullsize power unit visit Hamilton Jet, Christchurch New Zealand, the pioneers of waterjet propulsion. Founded by Sir William Hamilton, O.B.E (1899 to 1978) in 1939. In 1953 the waterjet became reality, based on the work of Archimedes William Hamilton improved this and turned it into a propulsion system for boats.