Muddying the (river) waters

[plloyd1010]

I'm working the brown water navies of River Battleships and Blue Danube (formerly River Fleets), and come across what is an apparent rules conflict.

• 17.18 Hits: Once a boat suffers a hit, it retains that hit throughout the scenario damage is cumulative and the boat does not have to suffer two or four hits at once to be reduced or destroyed.
  
• 17.54 Fire Results: If a full-strength boat with a Hit marker on it suffers a hit, remove the Hit marker and flip the boat to its reduce side.
  

Making the assumption that 17.18 simply means that damage cannot be repaired during the game (like anything else can be repaired), that would make damage progression go like this:
   

Does that seem right to everyone? (Daniel H. especially.)

Assuming that is correct. Are all boats created equal regardless of size? Do large and small boats take for hits to sink, or should that have just been the large boats. Keep in mind that else where small boats and landing craft get sunk with 1 or 2 hits (depending on type).