I don't have experience of these models, so will be winging it a bit. Also the below novel assumes the shaft #4 is where the binding is. Did you mean the #18 bolt? Leave that on for now as #17 is the one that releases the shaft if it can be accessed.
The plastic bit on the side is a detent mechanism with a spring loaded ball that sits in 3 detents for F-N-R location, it provides the "click" in basic terms. If the whole lever assembly will come off in one bit it would be good as steel balls are so easy to lose. Plastic on stainless should not be seized, but who knows?
I took the liberty of visiting another diagram, which may not be the exact year/model, but hopefully close enough for this. See below.
The blue scrawls I drew point to two holes in the lower engine block through which the shift shaft passes, and I would imagine, though cannot see, that each side would have a nylon bushing. These bushings are often compressed by aluminium salts growing between the alloy and the plastic.
Now you could squirt some oily crap in there and work the shaft until it frees, but you'll be back at it in three months, with associated downtime etc, do it that way though if there is urgency, and do it properly later.
That #4 shaft needs to come out, clean it all up, replace parts as necessary, regrease & reassemble. Any automotive lithium wheel bearing grease is marine grade - without the tax.
Digressing a bee's apparatus, same goes for 80W-90 EP mineral gear oil and 75W-90 synthetic gear oil, automotive works at often half the price, and factory talk of emulsifiers in their brands is BS to justify the "marine" tax.
Firstly you need to ascertain whether the #4 shaft will slide out from under the powerhead with the lower cowling intact, and if not split the cowling open by undoing the 4 or so screws.
If you consider the previous diagram of the shift lever and shaft:
We need to remove the stainless linkage 6, and perhaps 5. Then there is a screw 17 with a washer under it that screws into the shaft at 90°, and it appears the detent stuff doesn't have to come apart to get the shaft out. Once 17 is removed the lever 7 should slide off the shaft.
You might then want to disconnect the shift shaft 5, and take the detent stuff to a bench to clean & regrease.
Put it all back together.
Test with BEER!