Years ago a guy where I worked brought in his boat and hooked up an attachement to allow him to run the outboard with a garden hose attached. I dont remember much from that but now I have my own outboard(1979 Chrysler 4 hp) Can the same be done to this? If not how do I go about tuning and tweaking the settings and making adjustments when I dont have it in water?

Well the attachment is generally called Ear Muffs or just Muffs (although this is probably a slang term). Any boat dealer will have them, they work very well. I would not run your motor dry for more than a few seconds, water is the essential element for cooling your engine and if you run dry for just a minute or two it can cause problems. Your engine is small enough that you could probably fill up a garbage can with water and run it in there, if you don't want to spend the money on the muffs. However, they are only about $20.  Make sure after about 30 secs water is coming out the pee hole. There are two vent looking things on each side of the lower unit, these have to be covered by the muffs or submersed in water.

My guess would be that old and small of a Chrysler does not have water intakes you can put muffs on.  If it does, they come in a couple off different sizes, for small and large motors, you would want to find a set of the small.

The only thing, you can't tweek carbs and tune a motor on muffs.  The back pressure created by the motor setting in water at the same depth as on the boat makes a huge difference in the way the carbs will adjust and the way the motor will run.  A motor also has to be loaded when tweeking carbs etc.  Motors can run great while on muffs or in neutral but as soon as you put them under a load, they fall on their face.  Out of the water or in neutral a motor can over rev just on timing advance when not loaded so you never even start opening the carb to see how it works.