there are kinda two nozzles, a reducing nozzle and a steering nozzle, which isn't really considered a nozzle. the wedge changes the natural angle of the water exiting the pump slightly. in this case, it would make the jet a little more straight back rather than slightly down coming out of the pump. i guess it can contribute to porpoising but probably makes the ski jump better.
The wedge has nothing to do with the shaft.
Where the water comes out the back of the ski is the NOZZLE. It is held on with 4-bolts. If you were to remove the bolts and put this wedge between the NOZZLE and where it unbolted from that is where it is to be mounted. All it does is, put anywhere from 1 degree to 3 degrees more angle onto the nozzle. With heavier skis these help as it gets the nose out of the water soon and you will gain some top end speed.