Well is looks you have already have some motor savvy. Given you still have a stuck piston (or frozen crank) you have a block of unknown condition.
Before going into the whole rebuild route I would exhaust every root possible to get the crank to turn. If you bust something you haven't lost anything at this point. Get a breaker bar on the crank pulley bolt and turn it like a Mo-Fo. If you soak it long enough you might get somewhere. Another thought is to overfill the crank case with some marvel mystery oil to soal the crank and bearings in case that is you issue.
I am not one to discourage DIY but a motor swap is a whole lot easier than a rebuild. Most likely cheaper too. Getting the heads right with proper valve geometry is not forgiving for engine longevity if you get it wrong
I've rebuilt motors before but I had an engine guy set the valves, rockers, etc.
I'd be much more inclinded to buy a motor already rebuilt and plunk it in. Since you don't need the boat in a hurry it seems, then it could make for a fun project.
Sounds like it's time for you to start reading on the Mercruiser Forums for the nuances you will run up against. Call Marine Parts Express as they may have a rebuilt "kit" to help reduce parts chasing. Good luck.