No, smaller is NOT better. Buy as BIG as your budget and the rating of the boat will take. There is a myth that bigger engines use more fuel. Complete rubbish. If you run at the same speed, the bigger engine will use LESS fuel as it is not working as hard (proportionally).
Cases in point. 1. My boat had an Mercruiser 165, inline 6 when I bought it. Later I replaced it with a Mercruiser 4.3LX, V6. About 45hp more, and it used LESS fuel, by about 20% for the same boat speed. 2. My car (Landcruiser 100 series) original engine was a 4.2litre straight 6 diesel. I replaced that with a 6.5 litre Turbo V8, and it now uses less fuel towing the boat than the original did without towing...
You have also been reading incorrect information. Those engines are quite good on fuel, when compared to other brands of similar size. No boat engine is even going to be as 'economical' as a car, the loads are just that different. My car and boat have around the same power, the car a little more. The boat uses around 1.3 litres per nautical mile (about 4 miles per gallon), the car (cruising not towing) around 20 miles per gallon.
Chris.......