There are damage "spheres" and "boxes" inside the models, and a ship has a total of "hit points" that can be expended. The hit points are what determines the sinking, but hitting a ship in the same place, while it would ultimately do more damage to a real ship, with a 3D model it sometimes doesn't. The area targeted has already expended its local hit points total, so another hit there almost seems to do nothing, though you usually hit a little one way or the other, and some ships sink like that anyway. If you're using manual targeting, aim a bit forward, fire one, pause for the bridge, fire two, pause for the rear king post, fire three (in simple terms), and you should have a good spread. If using manual, you could "lock", hit pk, and fire, unlock move forward, hit pk again, fire, etc., aiming where you want to hit, hitting the PK for a new "aim", and the "TDC" does all your angle solving... spread the hits across a ship's total damage zone. I do usually concentrate on an area though, like the bow to the stack, or try to anyway...
The game does seem to model a hit to the boilers, but doesn't do very well with prop and rudder damage...
