1. what are oil seals and how do you know they are leaking?
On each end of the engine where the crankshaft sticks out, there is a crankshaft seal. It's a round metal ring with a rubber lip gasket that keeps the oil from leaking out of the engine. You'll know they're leaking if you find oil in the bilge pan underneath the engine. I've seen a few motors that don't get used much leak through the seals. I don't know why, but guessed that the seals got old and stiff from being dry for so long. If it's not leaking much, just keep an oil absorbent cloth in the bilge pan and don't worry about it. If it's leaking a lot, the seals should probably be replaced before the motor gets run with no oil in it.
2. because i havent' actually started the thing, what is exact proceedure. It appears that i have a electric pull stop button, but i do not have any solenoid on fuel inj pump. how does pull out button work? electric or manual? ( i do not have manual shut down cable attached near throttle either)
My last three boats had diesels in them and they all had a pull cable stop, so I'm not sure how yours is set up. Generally there is some sort of lever on the injector pump that shuts off the fuel, either cable operated or solenoid operated.
3. Decompression Lever: Do you want this in the down positon when starting? (down is toward stern and up is toward bow) which is "on" and which is "off" cant tell from the service manual.
The only time I used the decompression lever on my engine was when the batteries were low. It should have a small spring to hold it in the "run" position, so if you wanted to use it, you would push or pull the lever against the spring. It's used to get the motor spinning for some momentum and then released to assist in starting.
4. So lets say im cranking the starter ( not more than 15 sec at a time to not cook it ) does the motor just kind of fire up start running or what happens?
You'll probably hear a cylinder or two start to catch (fire) and then all of them will go and it will smoke and rattle like crazy if it hasn't been run in a long time, especially if it's a cold day. Much of the wear on a motor occurs at start up because there is no oil pressure. That's why they rattle so bad too.