I’m sure some clever solutions exist that I don’t know about. Stuff like magnetic drive shafts. However, these solutions are not necessary for a functional boat.
First, boats leak. Boats take on water, and that water must be removed. That’s what bilge pumps are for.
Second, a good seal doesn’t have to prevent motion. Rubber can slide over a surface, especially a lubricated surface, while preventing any significant amount of water from seeping past it.
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