My vent runs the same way on my 1976 and when I replaced the hoses I added a loop to prevent water from passing down the vent and into the tank.
For the smell, I have done three things which have been successful.
The first was that I replaced the two engine compartment passive air scoops that are on the deck on either side of the tiller. I went with active solar powered vents. The goal was to get air from the bilge and engine compartment moving away from the cabin. Solar vents are great -- install them and forget them. On one of the vents I connected a 4" duct to ensure that it draws air from the lower bilge. The other draws from its base, directly below the deck.
My second job was to clean all surfaces in the bilge and engine compartment. The occasional fuel and oil drips over the years had made the whole area dirty and smelly. A strong degreaser and stiff brushes right to the bottom of the bilge worked for me. And you have to clean the engine too. As an aside, it was interesting to see how much paint came loose.
The third smell strategy was to eliminate the source of the smell by switching to biodiesel. Fuels have been been well discussed elsewhere in the forum but 100% bio-diesel (B-100) has been a good choice for me and might help you too. If going after the smell, don't bother with biodiesel blends -- to get the effect it's an all-or-nothing strategy.
Good luck! Getting the fuel smells out of the boat is a huge step in improving its habitability. I am so pleased that the blankets no longer stink of diesel...
Christopher