No need to fiddle with the prop shaft, various threads on this topic, water ingress..no consensus of opinion I am afraid.
A bit of grease (not too much) and O rings or possibly nylon washers is all it needs. the thrust washers Peter uses are, I imagine simply ordinary washers, Brass could be good. I only use the as supplied sort. Adjust the nuts up as tight as free running will allow and thats that.
My vote is for nylon bearings and stainless shafts. Not a universally held opinion (see above)
Bound to be a tiny bit of water coming in. Shouldnt be a problem if the boat is waterproofed inside.
Dont forget any fancy seals are only going to create drag.
Ashley