Skippy, the height of the motors is fairly critical to get them perform optimally. Too high and you will get ventilation and too low and the increase in drag, as Thika said, will seriously decrease the performance. The rule of thumb is to mount the motors so that the ventilation plate is at the same height as the bottom of the hull. This will apply to motors mounted on the transom. For every meter away from the transom (if you use motor brackets or out mounts) you raise the motor 2.5cm.
If you only get 4000 rpm at WOT , no matter what your speed, it means that your motors are laboring and you will drastically shorten the engines' lives.
Once your motors are mounted at the correct height you should test run the boat on flat water with your usual load on the boat and your motors should rev out the manufacturer's claimed maximum rpm.( 5500 to 6000 rpm for the 130 Yammies from memory) For every inch in propeller pitch that you go up or down you will drop or increase about 200rpm. So, Thika's setup sounds about right.
Many people confuse ventilation and cavitation. (not you, I see!) Ventilation is when the propeller sucks air down from the surface or gets caught in an air pocket in the water. This can come from a disturbance on the bottom of the hull, or the motor may be mounted to high on the transom causing it to suck air. It can also be from the exhaust gasses that get expelled through the centre of the propeller getting sucked back into the prop. The propeller spins in this air pocket instead of pushing its way through the water. Normally you will need to reduce the rpm’s right back to let the air go and then take off again. It feels a lot like the clutch slipping in your car.
Cavitation is when you get lots of pitting on your propeller. At the early stages it will be noticeable by pitting in the paint. Eventually it will eat into the blades of the propeller and in extreme cases the blades can be weakened to the point that they break off. The cause of the pitting on the blades is from quite a violent reaction under the water.
Cavitation is caused from low and high pressure areas in the water. When water is pressurised it raises the boiling point of the water. This concept is used in household pressure cookers, when water is pressurised it can be heated above 100° C without boiling and turning to steam. Water also works the other way – if you lower the pressure below atmospheric pressure it lowers the boiling point.
As the boat moves through the water, if the bottom of the hull has imperfections, it creates low pressure areas. These low pressure areas cause the water in that area to boil and turn to steam. These pockets of air travel backwards through the water. When they hit the propeller which is creating very high pressure areas on the blades the steam implodes back into a liquid form with a very violent reaction literally eating away the material of the propeller.