Same damagemodel as previously, just wth the bars displaying for feedback.
Ship's hulls have HP: it runs out, the ship sinks.
But compartments are also modeled, also with HP; if it reaches 0, the compartment starts to flood.
Basically the red bar represents hull HP, while the blue represents total HP of the compartments.
In the stock game you're usually forced to keep firing untill the red bar runs out. But there ate a few mods that deal with that problem, by changing the balance of the ships so they sink through flooding, or increasing torpedo damage so more compartments are damaged and start to flood.
At least with a mod, yes, your targeting matters. And as a general rule of thumb; HE for merchants, AP against DD.
Not that you should start gunning down DDs.
