Ok hopefully this will help lift your spirits, so take it with a grain of salt. Based on what you have told us and what I would consider a "fair" description of the problems here goes.
#1 do a compression and leak down test to see how the rings and or valves are holding up. If the motor was over heated due to a variety of issues and it fried the rings or worse this will get you closer to the truth without tearing it down.
#2 if the compression and leak down tests come back with normal results (which I feel they will) here is what I would recommend. What you described at (hard spots) could just be the natural feel of the motor when turning by hand, if it spins with relative ease I think you are fine.
#3 if the boat has an old battery, stock starter, original battery to starter/block positive and negative cables, and the original starter toss each of these items in the garbage and replace them with an Interstate 1000CCA marine Cranking battery, new battery cables, new Arco gear reduction starter.
#4 if the boat has point style ignition replace it with a pertronix electronic ignition and matching coil. Also make sure the timing is adjusted to between 8-10 degrees BTDC as this will effect hot and cold starting a TON!!!!!!!!!!!!!
These boats have been prone to a hard start issue when hot with the starter not getting much airflow being so close to the motor. Over time these will fail and draw too much amperage from the battery and if you have old crappy connections the problem intensifies even with a good battery. Replace these parts, check your timing after installing a new ignition, and enjoy happy boating. That boat with only 400 hrs on it should have a nice motor with plenty of life left. If you dont believe me I have almost 3000 hrs, that is not a typo, on my 83s original long block. I replaced the items above and she starts like a dream in 90 degree summer air after running all day long.
Let me know what you find out, and all these parts will cost you the following....
Cables 50-80 bucks
Battery 110 bucks
Starter 118 bucks
Ignition modules 150 bucks
Cheaper then a rebuild, way less labor too.
1983 MasterCraft Stars and Stripes
Cream/Red Metal Flake "Powerslot"
"The misery that is now upon us is but the passing of GREED-the bitterness of men who fear the way of human progress. The hate of all men will pass, and dictators die and the power they took from the people will return to the people and so long as men die Liberty will never perish."