Tree- You have two different things confused. The number that the Coast Guard gives you when documenting a vessel is the documentation number. That number has to be IN the boat with the NO. before it. Mine is painted in the lazarette. The only thing you have to do is put on the outside of the vessel is the name and hailing port. According to my local Coast Guard, they said 4" is the standard, but as long as it can be read from 100 yds, they're okay with it a little smaller. Take that as you may. It's only one Coastie's opinion.
According to the official Coast Guard website it says "The name and hailing port of a recreational vessel must be marked together on some clearly visible exterior part of the hull." To me, I read that as not having to be on the stern. Here is the link to where I got it. Hope it helps.
USCG National Vessel Documentation Center, FAQ Page