It costs 1,000,000 doubloons for a Phoenix Warbird, essentially the same ship that Captain Crawfish is sailing. It is the only one that can defeat him (you need the Shipwright and Cannoneer as crew).
You actually only need 500,000 or less, because you can borrow another 500,000 from the Golden Harbor bank, and when you win, you do not have to pay it back.
Once you start buying larger ships, getting this huge number of doubloons becomes far easier. You should buy the next larger ship as soon as you have the doubloons, or you may lose them.
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.
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.
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.
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.
Just dock in an island and your ship (or raft) will fully heal.
Once you defeat his ship, and have all five map pieces, return to Fort Ridley, where the Governor will give you a bone shovel and the location of the buried treasure. Sail to the new island, Skullduggery, and dig it up.
After sinking Captain Crawfish's ship, return to Fort Ridley and meet the governor.
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.
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.
Once you defeat Captain Crawfish, and collect all five map pieces, you can go to the new island (Skullduggery) and dig up the buried treasure. Before you have done these two tasks, the island has no purpose. After Captain Crawfish has been chased away, the Governor will give you the treasure location and bone shovel. (In order to beat Captain Crawfish, you will need the strongest ship, the Phoenix Warbird.)
The cannons on your ship!
You go into any harbor.