#1. Boat was in fresh water for several years with water in hulls as stated above bottoms are worn thru and I can see inside.. the styro foam inside one seems to move around any suggestions on a repair?.
The foam blocks are loose in there... no problem.
You need to glass across the gap and then build up layers of glass and re-shape the keel. This is commonly called a "bottom job". There are a number of posts on the technique.http://www.hobiecat.com/forums/search.php?keywords=%2Bbottom+%2Bjob&terms=all&author=&sc=1&sf=all&sk=t&sd=d&sr=posts&st=0&ch=300&t=0&submit=Search
#2. it appears that the glass may have osmosis lots of small bumps in gel coat and there seems to be NO soft spots that I could find anywhere, should I be concerned?
Less of a concern than the gaping hole in the keel. You would have to grind down each bump to expose the void and then fill with putty. http://www.boatbuilding.net/article.pl?sid=06/02/06/1923200
I have sailed before AMF sunfish and just got back into sailing with a little 11 foot sea snark(basically a Styrofoam beer cooler with a sail) looking forward to more speed.
Love that... I too came from a Sunfish to the H16 back in the day. Yep... WAY more power and speed, but so much more stable than a sunfish. The transition is not that tough and the speed will be a real thrill!