I attempted to explain the siphon cooling system in your other thread. No, it is not supposed to squirt any water from above. That would break the siphon and it would not cool properly. You do understand siphons, right? Or maybe you aren’t old-school where "some of us" used to siphon gas out of the neighbors car. S.h.h., don’t tell anybody.
In the first place, you don’t have it deep enough in the water. Secondly, centrifugal water pumps don’t work too well in a bucket anyway. Take the prop off and see if it cools better.
Yes, the exhaust tube gets very hot. There is fire on the inside of that thing.
I don’t know why it won’t run slow. I’m not there to check it out.