Then it ought to have had a colon, not a fullstop.

Agreed, 3:25 means Twenty-five minutes past Three O'Clock but I've never seen that notation to mean three hours and twenty-five minutes. The notation 3.25 means three and a quarter hours. The only way I know to express Three hours and twenty-five minutes in just numbers and punctuation is 3 5/12 hrs. There is no decimally exact way to express it.
Note there is a similar method used in baseball when recording the number of outs a pitcher records. Since an inning has three outs and you want to say that he (sorry ladies) pitched 2 and two-thirds (2.666...) the current convention is to state it as 2.2 innings, Two point three innings would be the same as three point zero innings, So, the types of notion you'd see in a statistics list for baseball pitchers would all end in point zero, one or two. It makes sense in the context if you know the convention. In the time problem, the convention of twenty-five minutes being expressed as point two five flies in the face of the convention widely accepted that point two five equals a quarter hour and nothing else.

3.416 (the 6 needs a bar over it) would be decimally correct.

I cannot fathom going through math that is systematically incorrect.

I am a diehard for the use of a colon in times. Here is Australia, it has become standard practice to use a full stop (no shift key needed) in printed documents, but I retype every document I get my hands on to change it to a colon. As a maths teacher, I want that decimal point to have a consistent meaning. Of course, the universal practice of showing the cricket progress scores in terms of how many overs have been bowled using a full stop (when the number that follows is out of a maximum of 6) totally undermines my position in the adolescent mind.

A maths teacher! Please pass by here often, Looney - I'm sure I'll be needing more help along the way!