One option to make lights on the ship a bit more practical would be to put one at the top of the mast in the crows nest with a radial menu to choose a color. It would be a great way to signal other alliance ships or other players in general. Certain colors would mean a distress call or an offer of alliance or truce etc. It would also be a way to cause confusion and set traps.
Ship's lights make you very visible from far away, especially at night but right now they are pretty much only for show as extinguishing them really gives no disadvantage. You can still see by moonlight fairly easily. Darkness at sea should be as perilous as dense fog but I can see why it's not in this game. It would be an interesting twist though if on moonless nights the night was so dark that it required lights just to get around.
