Floating in the sky

That's because it IS floating

WAIT! You're telling me it isn't floating? DANGIT! GUYS SHUT DOWN THE FAIRY HUNTING THINGS!

*suspicious squinting*

look at the ship closely. do you see a face

Smaller ships: You can't do it Gerald!
Gerald(flying ship): Let me dream goddamit!

https://www.youtube.com/watch?v=5Y3QZ_R26Nc

If it's on water then where is the sky?

You know... I think I've seen that ship before... a long time ago...

Is that not what's happening?

The Palaquin Ship got an upgrade.

NOT AGAIN, RON.

PETER FRIGGEN PAN

It's...it's not?

Hold on. The "waves" are grass, not darker water... And there's a very faint line right around the boat which is the horizon. Hope that helped :)