Talent, yes, the size of a bolt is determined by the diameter, then pitch, then length. For example 1/4"-20 ? 2 1/2" would be a cap screw with a diameter of 1/4" , 20 threads per inch and a length of 2 and 1/2 inches from the tip to the head.
The other way to do it is to snug the water pump housing bolts good and for the lower unit go "good-n-tight".
From a factory GM repair manual: "fully driven, not stripped". From a more tongue-in-cheek source (VW Bug maintenance manual with the motto "is your bug upset" and a picture of an upside-down beetle): tighten until it strips, then back a quarter turn.
Oh, and that picture tolent found is a snap from boatinfo.no service guide and it has more than one error in the list so use at your discretion.