You have to defeat ships and sea monsters and pick up the cargo that they leave behind when they sink.
you dive to were your ship(raft)is and you swim till you get to sand
Nothing immediately. You need to get the largest ship, the Phoenix warbird, and hire the Shipwright and the Cannoneer. Once you have defeated Captain Crawfish, you can go back to the governor and get the directions to the treasure buried on the small island.
It is the only ship with a wide beam and 3 large red sails. When you get your Phoenix Warbird, it is practically the same except that it is not outlined in black.
Just dock in an island and your ship (or raft) will fully heal.
The cannons on your ship!
You go into any harbor.
You never do kill him : he always escapes. When you have the most powerful ship (Phoenix Warbird), the Shipwright and the Cannoneer, sail around the new island, Skullduggery, and the recognizable ship of Captain Crawfish will attack. If you are able to reduce his ship's "health" to zero, he sails away in defeat. Then you can return to Fort Ridley and get the shovel and treasure location.
Try buying every ship in order unless you can afford one higher than the one your saving for.
After you collect all 5 map pieces, the new island (Skullduggery) appears near the Pirate Outpost. But there is nothing you can do there right away. You have to continue to accumulate doubloons, so that you can buy a ship that can beat Captain Crawfish. You need the largest ship, the Phoenix warbird, and the skilled crewmen: the Shipwright and the Cannoneer. Once you defeat captain Crawfish, return to Fort Ridley and the governor will give you the directions to the buried treasure on the small island.
There is a ship-seller on the island called Dragon Cove (on the upper left-hand side). It's called Ship Shape, and once you save enough doubloons to buy a ship (from trading items - see guide) you can buy another ship. (Answer provided by Little Bird)
When you have all of the map pieces from the 5 trading islands, the 6th island (Skullduggery) appears near the Pirate Outpost. You cannot do anything there until you have beaten Captain Crawfish. This will require the largest ship, the Phoenix Warbird, as well as hiring the Shipwright and Cannoneer. Once you have beaten Captain Crawfish, go to see the governor and he will give you the directions to the buried treasure on the hidden island.
He has a Phoenix Warbird. You can buy one just like it to battle him, but it costs 1,000,000 doubloons. Start by buying a small ship and work your way up, because you can earn more doubloons with a larger ship.