This is a 1951 engine, not a newer 60's or 70's model. The 16:1 ratio was for the inferior oils they had at the time. With good oil you can thin it to 32:1 without problems (reduces the rainbow oil slick this leaves behind), but it's better to err on the side of more oil since parts are scarce on these old mercury Wizards.
I run all my Wizards on 32:1 mix with Pennzoil TC-W3 oil without any problems. I would only use 16:1 in a pinch if I couldn't find any outboard motor oil.