My guess is the Pinion (bendix gear) would be softer material than the flywheel and may just be plain worn out. If the boat is an I/O, the engine has to come out of the boat to replace the flywheel. If the boat is an old fashioned "Strait Inboard" such as an old wooden Chris Craft, prospects might be better.
What kind of boat, engine, and year is it? NB