Merchants have very few actual decks. The engine and boiler rooms are large open spaces, several decks tall. The cargo holds extend from the keel to the weather deck.
http://www.jajones.com/pdf/Liberty_Ships_of_WWII.pdf
Scroll down to page 4 and you'll see a nice profile.
Also, hitting exactly on the waterline is nearly impossible. The target is rolling. Your boat is rolling. I've quoted Peter Padfield's description in the past: "Naval gunnery can be likened to shooting at a golf ball rolling across a mantle with a pistol, while sitting in a rocking chair being rocked at random by someone else."