This is one area that can sink your boat so I would definitely pull the cutlass bearing out and replace it, pull the shaft and remove the stuffing box. You should replace the stuffing box hose, and the hose clamps and repack it:
Doing this will also allow you to inspect the prop shaft and look for excess wear and dezinafication (if the bronze looks pink in some areas it will need to be replaced).
The shaft is 7/8". The cutlass bearing is locked into the stern tube with one or two set screws on either side of the stern tube--ususally covered in layers of bottom paint and sometimes covered with caulking. If you dig around with the tip of a knife you should locate them. Once you remove the two set screws, take a short piece of wooden dowel that will just slip into the stern tube from inside the boat (but a larger diameter than the cutlass bearing) and tap the cutlass bearing out. It should come out fairly easily.
The stuffing box hose is an extra tough variety, not just marine exhaust hose. Be sure to double clamp the hose on both ends with new AWAB 316 stainless hose clamps. Doing this work will mean you will sleep much better on the boat and not have to worry about any of these parts for years to come.
Regarding the gas tank. It is Monel so there should be no problems with it; however you should take this opportunity to ensure that
- it is firmly attached to the cradle it rests in,
- the cradle is still firmly glassed to the hull,
- the fill hose is in good condition, hose clamps in good condition and that it is firmly clamped to the cockpit fill fitting (the top of the tank is very difficult to get at when the engine is in place).
- the vent hose is properly attached and not broken or leaking.
Finally, since you are working on stuffing boxes, don't forget that your rudder uses a stuffing box as well (sorry to add to your work list).