Going to another lake for a day with a boat like that could make for a long day. But I don't want to burst your bubble. Personally I like the bigger beach cats, for the room and flotation. I'm on the large side so I can pitchpole something like a hobie 16 while moving at 0 knots, on the beach.
I just looked through some old posts and think you bought my old boat. You bought it from Phil, in GA, right? If so, 99% of the blisters are a new modification.

What are you filling the holes with? I found interlux watertite to be the easiest to work with.

What goes on under the bottom paint depends on what bottom paint you're going to use. If you're going to dry sail it I'd go with something hard, without anti fouling properties. I used interlux performance on mine, it worked out well. If you use a 2 part paint like that you'll need to use a 2 part primer. Two part paints cost considerably more but last longer.

For the waterline, make a mark on the point of the bow where you think the waterline should be. Stick a piece of masking tape to where you think it should go on the back corner of the boat where side meets the transom. Roll out enough tape to reach to the front of the boat. Stand away from the boat so that the tape is only stuck on the back corner. While holding the tape tight, move toward the bow, trying not to move the end of the tape up and down, and stick it to the mark you made in front. You should end up with a straight line from bow to stern. Unless you rub the tape to stick it on good, you should be able to pull either end off and make adjustments. Unless you pull the whole length off when adjusting, you'll end up with a wavy line.
There may be a better way, but that's what I figured out through trial and error. You'll want to use fine line tape, not regular masking tape.