Hi Zach, welcome to boat ownership
At what rpm's and boat speed are you seeing the smoking?
From what you describe with the stern squatting noticeably you might be closing in on hull speed for your boat. Once at hull speed, increasing rpm's/power turns copious amounts of fuel into smoke instead of speed.
For example, my boat has a Yanmar 3 banger. I cruise about 2700 rpms yielding about 6.5 knots. With the current prop, if I try advancing the throttle to say 3000 rpms (I think 3200 is max) the stern squats with a bunch of black exhaust smoke and very little speed increase.
For my boat/motor/prop combination I live with cruising at a slightly lower rpm and 0.5 gph fuel burn. It's normal for my setup and might be for yours.