Nathan,
I've seen on some boats where they'll run the drains overboard above the water line. Usually you see a 2 to 1 before going through the hull. That lets you put just a single hole through the hull instead of two. It will need to be big enough to accommodate the volume of the two existing drains together though.
As to your other question, I believe most of us have the two drains below the waterline as described. That was how the factory did it on ours and many others. It isn't so bad as long as you keep the seacocks in working order and make sure your hose clamps are in good shape on a regular basis.
Tate