Welcome aboard! The Seafari is probably the most versatile of all the 20' models and a 78' would have many nice upgrades not found in earlier models!
Regarding power, it sort of depends on how you plan to use the boat and what you want out of it, i.e., water skiing at high speed in flat water, cruising with a heavy load, good economy with maximum range, frequent offshore use in rough seas, etc. I ran mine for over 30 years with a 1975 300 lb V-4 2-stroke that was about 100 hp at the prop and averaged 2.8 mpg on 6 long trips to the Abaco's in the eastern Bahamas carrying very heavy loads. It wasn't fast, cruising at about 20 kts @ 4500 rpm, but it rode extremely well in rough seas because it was well balanced with that light motor on the transom. The 20' hull will start going airborne at 20 kts in seas over about 3', so you can't use a lot of power if you run in those conditions. The VDH hull design is very efficient compared to modern hulls so it doesn't need as much power, but it is weight sensitive and performs best with lighter motors.
For the near term, if you can get the 150 running, I'd suggest doing a decarb on it, as it may just have some stuck rings. Then recheck the compression when warm or ideally do a leak down test on it. Those motors are simple and easy to work on, although that trim & tilt assy can be a bear on either motor if you have to take it apart! An '85 is probably the 90 degree crossflow design instead of the newer 60 degree looper, so it'll be a 2 mpg rig! It's probably about the same weight as the 115 4-stroke. The latter should give you close to 5 mpg, but you'll have to change the controls and probably most of the gauges, and would be expensive if you had to have a dealer do much work on it. It will be adequate power if propped correctly, provided you don't want to cruise faster than 20-25 kts. I'd probably lean toward that motor if wt. and cost are similar to fixing the V-6.
The best older power for that hull IMHO from a balance/ride perspective would be a light V-4 2-stroke, either a 115-120 OMC/BRP looper or a Yamaha 115-130, so if you can get that V-6 running, it might be worth shopping around for a newer used motor. For modern clean motors, I like the E-TEC, either 90 I-3, 115 V-4 or 135/150/175 V-6. For 4-strokes, I wouldn't pick anything heavier than the 140 Zuke, which is about the same weight as the V-6 E-TEC.
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