VW engines have been used for boat propulsion with minimal success. In 1960 the "Volks-liner" was introduced. It was a 17' wooden boat, powered by a 36 HP VW air-cooled engine. Not too many of them were made. To see some pictures of one, go here:
http://www.edu-television.com/gallery/album21/aac
However, mounting one in a 12 foot fishing boat, which I presume has an outboard, would not be a project I would recommend.
You'd have to reinforce the hull, install stringers, remote throttle and steering. Install a rudder assembly, strut for the prop. Shaft log (the opening through the hull for the shaft) devise a transmission/reduction gear to reduce engine to shaft RPM, or redirect the shaft rotation (V-drive)
Add to that, the increase in static weight would make the boat unstable and probably unsafe. There's a reason that naval engineers design boat hulls for the desired propulsion system. To keep them above the surface with the correct side facing the sky.
