The answer to both questions is the same: he has a Phoenix Warbird, and you need one just like it to beat him. The problem is that it costs 1,000,000 doubloons, and you are only earning a few dozen doubloons on the raft. You will need to buy a larger ship when you can afford it, and then another even larger one, until you have 500,000 doubloons of net worth. You can borrow the other 500,000 from the Golden Harbor Bank. But you will also need to hire the Shipwright and Cannoneer to improve your ability to fight.
The stopwatch is in a chest on Captain Crawfish's dream ship. Get the red key from over the ship's door and take it to the chest on the lower deck.It is in one of the two lockers in Captain Crawfish's dream -- the lower one whose red key is in the box over the door.
He has a ship wright master (if you want one you can hire one) the ship wright master fixes the ship when its moving
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.
Captain Crawfish has a ship with the speed and cannons of a Phoenix Warbird. Attacking him with anything less has very, very little chance to succeed. His ship will repair itself as yours does (with the Shipwright). When you have found and merged the 5 map pieces, and the new island Skullduggery appears, that is where Captain Crawfish is easily found. When you have a Phoenix Warbird, the Shipwright, and the Cannoneer, you are a match for him. He will not actually sink, but sail away when defeated. (see related question) *You can reduce the time it takes to get the Phoenix Warbird by buying each larger class of ship when you can afford it. You may skip one or two if you are earning large salvage from sinking sea creatures and pirates.
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.
Once you have all 5 map pieces, one from each island, the small island appears near the Pirate Outpost. This is where Captain Crawfish generally appears even before the island becomes visible, but you can sneak in and dock rather easily. There is, however, nothing to do there until after you have beaten Captain Crawfish and gotten the treasure location from the Governor.
Captain Crawfish is the pirate you have to beat on Skullduggery Island. Aside from getting the treasure map pieces, the game requires you to outduel him in battle. The general procedure is:Travel around to get as much money (killing monsters, finding debris, selling what you have found, etc.)When you can afford them, hire the skilled Shipwright and the Cannoneer on your crew (they are at Dragon Cove and the Pirate Outpost)Buy each higher-ranked ship to increase your cargo space and firepower, until you have the highest one (it costs 1,000,000 but it's needed - you only need 500,000 and a loan for 500,000 more from the Golden Harbor Bank)Now travel to the area near the Pirate outpost, the only area where Captain Crawfish will appear. Since you have a ship equal to his own, it shouldn't be really hard beating his ship. Once he runs away, go back to Fort Ridley and the governor will give you the location to a hidden treasure on the new island, and a bone shovel to dig it up. Go back to the island. While you're digging up the treasure, Captain Crawfish will return. But your crew mates help defeat him and he flees. When you return back to Fort Ridley, you can get your medal and Captain Crawfish won't be harming anyone anymore...or will he?(see related questions)
It is one the beach by the lighthouse
Captain Ahab's ship, the one he hunts for Moby Dick in, is called the Pequod.
Normally, only the most powerful ship, the Phoenix Warbird (using the Cannoneer) can defeat Captain Crawfish. There is a tiny chance of beating him with the Steaming Fury ironclad. The problem is that he will stay close to the Pirate Outpost and simply dock there to repair his damage (as you can). You would need to be very lucky, so the usual plan is to fork out the million doubloons for the Phoenix (and hire the Cannoneer). *If you are attacked by Captain Crawfish, one way to hit him is to let him chase you. If you fire cannon shots almost "straight up" (aimed above your own ship), they will fall onto him as he pursues you.
If you stray into the sea area below the Pirate Outpost, you may be attacked by Captain Crawfish. In order to beat him, you need a ship as powerful as his: the Phoenix Warbird. You will have to buy smaller ships as you can afford them, so that you can earn doubloons more quickly. When you have 500,000 saved up, you can borrow another 500,000 from the Golden Harbor Bank and buy the Warbird. Once you have this most powerful of ships, you can attempt to sink Captain Crawfish. If you succeed, you can get the location of the Buried Treasure from the Governor.
The captain assumed that his ship was one mile further south than it actually was. Because of this error, the captain put his ship in a very vulnerable position.