1 1/4" through hull, what the heck?

[Tillsbury]

Correct, the pump only works to raise the head of water. It's irrelevant how wide the inlet pipe is. If you think about it, you can consider the next three feet under the hull as if it were a bit more pipe but the diameter of the boat's length.

The one difference that does apply is that friction within the pipe will affect the amount of work the pump has to do -- a larger pipe is easier for the pump to suck through (as NorthCoastJoe said above). Again, just think how much harder this would be through a very very narrow hose.

Increasing the inlet and/or hose size will make life easier for the pump (particularly if it gets partially blocked) but won't affect the engine at all. Not the same thing as changing back pressure in the exhaust at all.