Yes that is kinda right. A bigger prop diameter/greater number of blades has greater surface area within contact with the water
, thus greater efficiency. But at the same time, the greater surface area also produces greater drag. Or in other words, more effort to turn the thing around. So ultimately a balance has to be reached of power available being able to turn the prop and the prop getting that power into the water
and moving the boat forward. It would be of no advantage to have all 10hp taken up just to turn the prop around without getting any of that 10hp into a forward movment.
The number of blades is an even more complex issue and choosing a two blade, three blade aor four blade prop has a lot of science around the choice. Then you get into blade shape and profile. That has so much gobbledegook around the science of it, it is why each prop manufacturer has there own design. what ever the shape and profile is, the main point is that prop design today is very different to what it once was. Decades ago, the design of a prop was thought of as a screw. True in some respect. But the present(last couple of decades or so) day designs are based on a rotary wing. The prop no longer screws through the water, it lifts through the water as if it were a wing. So design is influenced by principles based around wings in a fluid. Or Hydrodynamic/aerodynamic principles.