Sorry when we all said buy that engine I don't think any of us thought to say prop guards are not needed in normal leisure use and they spoil performance so yep take it off and you should gain a great improvement.
That prop does look well past it so yes I'd get a replacement or have it repaired. It's not just it's effect on performance but an out of balance prop will over time cause gearbox bearing/seal issues.
It can be made like new by people such as Steel Developments...
9.1/8" to 11" diameter Aluminium Propeller Blade Repair Service 2, 3, or 4 blade
and it will be about £58 inc them sending back to you so add in your cost posting to them it will be almost £70. Having it repaired with two lots of post plus their workshop time will likely mean you'll not have it for next weekend.
They would sell you a new one for £96 inc post.
So your best bet may be Ebay where as an example this excellent looking used one is £57 inc post but he is accepting offers so perhaps £50 inc post and you'd have it for the weekend.
http://www.ebay.co.uk/itm/MERCURY-MA...MAAOSwnHZYgKEY
When you are ordering a new or used prop you must take off the old one and measure the gearcase (the dia the back of the prop sits against which is probably 2.5"), count the splines which are 14 on later motors but I think 8 on yours, the overall diameter of the old prop and finally you need to know the pitch you want. The standard for a 15" is a 9" and I've never known this not suit a whole range of uses. However don't go over this or it will be like trying to pull too high a gear in a car.
Give all this info to the seller so you are sure of getting the correct one..
Hope that helps.