Generally speaking, Bay sailing is exactly what Catalinas were designed for. Did your friends tell you why "not for the Bay"?
The alternator has a higher output than the stock unit. It's sending more electrons into the system. Best practice is to regulate the flow with a unit that is external to the alternator itself. Regulators run the gamut from simple devices that just make sure the batteries don't get overcharged to very complicated electronic switching systems. Here's an article on one particular regulator from Mainesail, one of the moderators here (who is having some health issues now I understand)2) "externally regulated". Sorry, don't know what that means.
3) I asked the broker if he knew of anything that might come up in the survey. He said that the prop was over-pitched to accomplish a performance issue for the current owner. Not quite sure what this means either.