Get yourself a Quicksilver pump dispenser. I used to use the 237ml tubes, but it's a messy affair. Chances are it just needs a little more gear oil, but yes it should run out of the top-hole so level is spot on, then close of drain-fill screw, then finally the vent screw. A decent flat-head screw-driver with a pair of claw-grips can provide the final torque.
Opening it up is fine, do that before it goes anywhere near water would be my advice.
Tohatsu use standard fibre washers that compress, but chances are you are using Mercury Mariner drain seal washers. The side with the grey insert which looks slightly raised will provide the waterproofing and should face the engine, that would be my guess.
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