As this will be in and out of the water -- I would suggest using pressure treated wood. It will endure much longer.
As for the tail lights -- I see no reason to move them. On all trailers that I have had the "Tail light" is mounted on or near the rear wheel well of the trailer and the boat partially covers it.
that being said, as you will only be 1-2 feet of overhang they should be more than adequately visible (which is the key)
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A bad day on the Big Lake (although I've never had one) - Still beats a day at the office!!
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