Re: cutlass bearing
The cutlass bearing is a special bearing- often bronze lined with a rubber liner having grooves cut in to allow water to lube and cool it. There are other materials too however,such as fiberglass with a liner.
They usually have some wear after they've been in use for a while. It should not be too sloppy. The rule of thumb I use is a maximum 1/16 inch of radial play per inch of shaft diameter. Thus if yours at 1" diameter moves up to 1/16" radially it's still OK. Replace it once its over that 1/16" dimension. Just be sure your shaft isn't worn as well and contributing to the radial play.