Not sure about the hole under the observer seat, but the stock location for that battery is where it is. The previous owner didn't do anything but leave it there. I agree it's a pretty dumb place to have the battery. I have read that the cables are long enough that you can just pull them through the bilge and redirect them where you are thinking. How you get it there, I don't know. I just held my breath and hoped for no fuel leaks when I owned my early 90s Pro Star.
Previous: 1993 Prostar 205
Red 1998 Ski Nautique, PCM GT40, 310 hp, , Acme 4 blade, Perfect Pass SG/Zbox.
Be kind. Have fun.