Like a lot of other things in life, it's a risk/benefit problem: If you're not willing to take the chance that the battery leads will short, then waterproof 'em; if you are willing to take that chance, then don't.
The easiest fix for the problem is to get a Lock-n-Lock storage container (they're leak-proof) of appropriate size, make a hole in the lid to accommodate the battery leads and seal them with Marine Goop. Then, put the battery in the box, attach the leads, close and lock the lid and, PRESTO! the battery is waterproof, all for about ten bucks and in about ten minutes.
Then how do you secure it inside the kayak without it banging around? I had earlier tried various "containers" to house the battery but never really found a secure easily accessible way to mount the "container" inside. Might suggest that the rear hatch storage trays are pretty much waterproof when the lid is snapped on properly.