Bake and cool 2-layer cake. Ice smooth in royal blue. Cut and attach Sugar Sheets! decorations with piping gel as described below. For waves on cake sides, use border punch with Waves Cutting Insert to cut three lengths of large blue waves 10 1/2 x 1 in. high. Attach around cake, trimming ends if needed. Cut three medium waves 10 1/2 x 11/4 in. high. Attach over large waves, positioning strip so top of medium waves hits at low point of large waves. Cut three small waves 10 1/2 x 3/4 in. high. Attach over medium waves, positioning strip so top waves hit at a different spot from other two strips. For waves on cake top, cut two waves 10 1/2 x 1 in. high. Attach 1 1/2 in. in from edge of cake.
For large boat, cut red circle using largest metal cutter from set. Fold in half and seal with piping gel. Use wide end of tip 2A to mark windows. Use FoodWriter to color windows and draw plank lines 1/2 in. apart. Attach lollipop stick to back of boat with piping gel, leaving 3 1/2 in. extended at bottom to insert into cake. Use white sheet to cut 5 x 3 1/2 in. high triangular sail. Attach to stick, leaving 1 1/2 in. between sail and boat. Insert in cake. For small boats, cut purple, red and bright yellow (one each) circles using punch with largest Layered Circles Cutting Insert. Cut circles in half for two boats in each color. Use narrow end of tip 12 to mark windows. Use FoodWriter to color windows and draw plank lines 1/4 in. apart. Attach to cake sides, tucking bottoms slightly behind waves. Cut 1/8 x 1 3/8 in. long strips for masts; attach. Cut white triangular sails 1 1/2 x 1 1/4 in. high; attach.