I don't think that the long shaft motor will be the long term concern, the 33hp might be. IIRC, a 16ft Kingfisher is rated for about a 60hp.
As long as you are aware that the skeg and prop are a couple inches lower then ideal, it should work ok. It will be a little deeper in the water, so there's more leg creating a little extra drag. I don't think that will matter much w an OB that's about 1/2 the rated max hp.
It will get you were you want to go, except into very skinny water

You'll want to be very conscientious of tilting the motor up for trailering to protect the low skeg and when launching off the trailer. As well as watching for rock and stump stick ups that'll get clipped by the prop since it's a little low.....
But as you rebuild it, keep an eye out for a little larger OB, IMO, you'll eventuallly want the extra HP. No reason to replace it if it runs though, not a high priority item unless the current OB isn't great runner. I think you'll get the key start sorted fairly easily. I would suggest you look for a similar vintage Johnson/Evinrude so what you have can be easily used w/ a replacement OB. A Merc would require cables and ignition swaps.