I have a 1979 sleek craft SST  with a 12JF-A the pump was put in with what looks like sea going epoxy, it is in there like a rock. there is some chipping and breakinging off of the epoxy in the intake to hull blending (see pics) should I grind out the old blending area and install new ? or do I have to cut the complete pump intake out of the boat and start over?.

Depends on if you want a permanent fix or not. Patching it up might hold for a bit...If you have children and they ride in it....?

no kids , but my cooler is pretty valuable   kidding aside the bond between the pump and the hull is so good I think I would destroy the hull getting it out making it necessary to rebuild the pump fiberglass mount. the chipped area looks like somebody used bondo as a filler to make a smooth transition I believe I could grind it out and do a much better and cleaner job than they did.

If the rest of the mating surfaces look OK I would begin by feathering out the cracked areas and see if you can get to the point where there is no parting line (crack). If not and this sucks, I would pull the whole enchilada and start over....

There is a small chance that someone simply attempted to smooth out the transitions and did a piss poor job and it began to crack. 

I would strongly suggest using Heavy Duty Sea Going Poxy Putty to feather out the rough areas, but when applied, it needs to be stupid smooth before it cures, its like sanding titanium...

Also, just as a precautionary measure, you should check out the area under the boat around the pump to ensure the glass is not spider cracking, the JF pump installs are uber strong, but if the glass is under a major stress, all could be for not.

This repair of the intake side should not take more than a day I would think.

Better pictures of the surrounding area may help determine if anything else is going on.

GT