Choosing a better battery location

[expozen]

My batteries are currently in a small compartment between the electrical panel and the engine. I'd say it would be the best location for them, except that there is an 1-1/4" thru-hole in that same compartment. It makes me uncomfortable to have such a potential source of water in the same small compartment as such a potential source of electricity. Is this a normal installation? Should I feel so uncomfortable? How would you feel about this? And how much effort should I expend to relocate the batteries? There is really only one other possible location for the batteries. But I'm not sure if it's better or worse.

I've attached some photos that show the current location of the batteries, and one that shows a possible new location for them. The new location would be were the box labeled diesel sits. Which is between the engine and the rudder post, and above the shaft strut. I've never stored extra diesel in that box so I could do without it. But I'd have to build something new to secure the batteries in that location.