Raise the outdrive and inspect the bellows, if cracked then time to replace. Loose bolt has to get fixed. Certainly can be a source of water ingress. There is rubber gasket that seals the outer plate to the transom, that is more involved to replace and motor needs to come out. If boat is on a trailer, put the plug in the transom and put your garden hose in the boat. Soon you will identify the leak.

For those without thumbs, it's s Garden fookin Island, not Hawaii