And the switch tested good? (on-off)
Yeah ohm it out open and closed I also checked it from ground-to-ground and I had a good ground
And the switch tested good? (on-off)
I'd rather be fishing.
I can't say for certain by your response that you tested the switch but if you know the switch is good, then the problem is most likely at the ignition switch that you mentioned having replaced earlier. One of the two leads coming off the kill switch should go to the ignition switch and pair up with a black/yellow wire. The other should either pair up with a black wire on the ignition switch or tie into a grounding block.
I'd rather be fishing.
The kill switch is designed to operate two ways. Both ways the switch takes the voltage and shunts it to ground (the frame of the motor). The first way is by (pushing the kill switch with your finger,second you should be able to ground the motor by pulling the lanyard out of the kill switch. Basically what is happening in both these two methods are doing the same thing, meaning the switch closes-not opens(the voltage is dropped to a point that the engine cant run by taking the 12 volts to 0 volts by shorting it to ground. BTW i wouldn't tie the aluminum boat to the ground of the battery.Just my 2 cents worth.
Although many smaller, tiller handle outboards have a "push to kill" function that you described, Mercury uses a toggle switch that is lanyard operated. Also, the voltage of the kill circuit varies by make and design but specific to the OPs motor, should be <2vlts if memory serves. As for grounding to the boat, It really doesn't matter in an electric start motor application. The fact that the motor is bolted to the aluminum hull automatically makes the hull a negative ground.
Of the possible failures that could create the problem the OP is experiencing, one possibility is that there is a failure of the ignition circuit to "kill" the ignition by means of grounding the circuit. Since the ignition switch feeds power to the PCM when in the on position, the key will not only apply a ground to the "kill" circuit but also cut off power to the PCM when moved to the off position. The kill switch only applies a ground to the ignition component.
I'd rather be fishing.