I use a hybrid of method one and two. Deck out my officers first, as they have the biggest impact, then petty officers with the key qualifications next. Also for realism, I tend to award the sailors that have the most patrols first.
Then with the seamen, I like to award to the lowliest seamen first, to sort of boost up the rear and strengthen the weaknesses. A chain is only as strong as its weakest link approach.
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"My, God! Those bulkheads! Did you hear them burst!"
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