Hi Darryn,
Let me try to answer your questions :
Perhaps it`s different in Aus, but in SA we had an ageing fleet of fibreglass mozzies, mostly built in 1977-1980, they were really heavy, mine was 147kg. The lightest timber boat at the time was 125kg, and he was always at an advantage. Other timber boats, built the old way, were from 130-140kg, so the boats were`nt that far apart, but still not close enough to be "one-design".
Then one newcomer to the class, who is now instrumental in the growth of our class, got hold of the 1995 Auzzie building plans, built a boat to 100kg & blew everyone away.
The rest soon followed, built 7 wooden boats, all to within 5 or 6 kg from eachother (4 boats were built by one builder). We then appointed a professional boatbuilder to make a mould off one of the timber hulls, and he produces hulls which weigh the same as most of the timber hulls. I`m sure you could build a boat a few kg lighter, but we`ve found the spinnaker evens things out a bit. Upwind a heavier boat is not at such a disadvantage, and the spinnaker provides enough power to overcome a weight disadvantage, within limits. We don`t consider a 5-8kg weight difference as a big deal, the winner of our nationals` boat is about 7kg heavier than mine, and he still beats me most races. I think a 10% weight difference is not really going to determine the winner as much as sailing skill. Having said that we are trying to keep the class as close as possible with regard to boats.
With regard to being dispensated for being "underweight", we are sailing off an ISAF handicap of 1.13, based on an all-up weight of 100kg, and none of our boats are that light here in sloop configuration with spinnaker.
The Auzzie boats, even at 85-90kg with spinnaker,would be on 1.09 / 1.10 on ISAF, which makes it about 5 or 6% slower than full F16, a situation which allows us to race against full compliant F16 boats, since we`re not faster than them on paper. This has been arranged with the F16 class chairman in order to promote F16 growth, I don`t see dispensation being removed in the future, as long as we accept the spirit & intent of the class, which is basically "first in wins" in open-class 16ft boats which are similar in performance, such that any performance difference between boats is easily negated by sailor skill.
I hope I`ve answered you questions.
On an interesting point, ISAF rates certain boats as being quite a bit faster in cat-rigged format, the number I get for a sloop mozzie at 90kg would be 1.09, while cat-rigged is 1.05, VERY close to actual F16 predicted performance, although I don`t believe this is accurate, as we find the sloop is faster, in Aus the guys say cat-rigged is faster !
Perhaps we don`t know how to get the best out of the boat without our crews!!

Cheers
Steve