Wow...those are rusty, nasty screws. There has been a lot of moisture in there for a long time.
I agree that there's an underlying concern here with the condition of the wooden beds themselves. I would look at anything you do as a generally temporary measure, with a known need for more detailed inspection and repair later.
The hardest part of your repair at this point is proper access to the holes with the engine in place. It will make the job more difficult, but still possible.
A good repair can be made by bonding the fasteners in epoxy.
The West System Website wrote:
Bonding fasteners and hardware
Installing screws and other threaded fasteners with WEST SYSTEM epoxy dramatically improves load carrying capacity by spreading the fastener's load into a greater area of the substrate. There are several methods or levels of hardware bonding depending on the loads on the hardware.
Basic fastener bonding
For improved pullout strength and waterproof connections, the easiest method is to simply wet out stripped fastener holes and new pilot holes before installing the screws. Epoxy penetrates the fiber around the hole, effectively increasing the fastener diameter. Epoxy also provides a stronger interface with the fastener threads than wood fiber and keeps out water.
1. Wet out a standard-size pilot hole. Work the mixture well into the hole with a pipe cleaner or syringe (Figure 15). Thicken a second coat of epoxy as necessary for stripped or oversized holes.
2. Insert the fastener in the hole and allow the epoxy to cure.
Advanced fastener bonding
For greater strength and stability, drill oversized holes to increase the exposed substrate area and the amount of epoxy around the fastener. If the fastener/hardware can be clamped by other means, the oversized hole can be extended to the end of the fastener.
1. Drill oversized holes 2/3-3/4 the depth of the fastener. The diameter may be up to twice the fastener diameter (Figure 16a).
2. Drill a normal sized pilot hole at the bottom of the oversized hole to the full length of the fastener. The normal sized pilot hole serves to hold or clamp the hardware in position until the epoxy cures.
3. Wet out the holes and the fastener with epoxy. Allow the epoxy to thoroughly soak into the exposed end grain of the wood.
4. Fill the hole with thickened epoxy/adhesive filler. Use 404 High-density (preferred) or 406 Colloidal Silica.
5. Install the fasteners with just enough force to hold the hardware in place. Allow the epoxy to cure thoroughly before applying load to the hardware (Figure 16b).
More information is available in
West System publication 002-550 Fiberglass Boat Repair & Maintenance, which you surely have in your library. (What do you mean you don't have this?)
Or, for really detailed information, check out
The Gougeon Brothers on Boat Construction: a great reference for all things epoxy, regardless of what brand of epoxy you like. Chapter 14 covers fastener bonding in extensive detail.
If you want to be able to remove the fastener, you can coat it in ordinary paste wax first. The epoxy won't stick to the wax, enabling you to remove the fastener later. Figment's point was that the wax doesn't always guarantee easy removal, so be sure you can get in there with some other means if you have to. (There's always a way...)