I had a Diablo for a number of years, and did some experimentation with transom height. She was used year-round for commuting, cargo, and joyriding in the lower Kennebec River: miles pounding into short steep water, sometimes racing down near-breaking ocean swell, and also frequently skimming over skinny water, above mudflats, usually on an outgoing tide.
I bought the Diablo used, heavy, and badly built (when it was time for repairs, I discovered a layer of uncured goop between ply and glass

with an old 15HP long-shaft. The 15 proved nearly unable to get onto a plane with more than 5-600 lbs passengers and cargo, and the long shaft required far too much depth.
When it was time for new power and a rebuild of the hull and interior, we chose a 25HP short shaft 4-stroke. I left the transom top where it was, and cut a wedge-shaped "tunnel" out of the bottom, about 6" wide, 12" long, and tapered from 0 to 2.5" at the transom, so the short-shaft motor was permanently "jacked". Performance was beautiful, planing easily with anything but a very heavy cargo. In a pounding chop, the boat can take a lot more than you can.
Other modifications at that time: Interior changed to a pair of longitudinal seats/float chambers with a deep well down the center, and a raised sole forward. This made her 80pct self-bailing, with rainwater collecting only along the centerline. Lower stem and the first 18" of the bottom were armored with aluminum plate, to facilitate landing on ledges. (nose up til you bump a ledge near the water line, then use the engine to push up onto the rock for a secure landing)
As to the transom height/slop well question, even cut down to 16", I wouldn't worry too much about water over the stern on your not-so-big-lakes. You can always add a little slop well later.
Diablo is a really great boat - have fun!