A couple more thoughts on the subject - the transom height measurement is from the top to the bottom of the boat (or keel, if there is one) and not to the waterline. The reason is that at speed, the water level will, in effect, be even with the boat bottom, at least in the short space between the back of the boat and the motor lower unit. That said, your boat and contemplated motor combination might not move forward fast enough to cause this situation. The important thing is that the lower unit (below the cavitation plate) be below the surrounding water during all phases of operation. I would say that anything around 15 inches that pleases your eye will be fine with a "short shaft" motor of 2 -3 hp.
And finally, there are thousands of old motors in use, carefully restored and maintained by members of the Antique Outboard Motor Club, Inc. (AOMCI) - a very active organization not at all unlike the WHCA in their activity and entbhusiasm with local chapters all over the country. There will be some in your area, and they would be very helpful in your search for an appropriate motor. Look them up on the web to find a chapter near you. I matched a 1949 Martin outboard to my 1949 Sebago wood and canvas cartopper. Good luck. Al