the larger the scale the more details can be added but there are a few considerations first is the size of the ship. Take the steamer Mississippi of 1841 at 1/4 inch = 1 foot scale the model would be 5 feet long and a foot wide, so you need space to display it. Then there is the cost of materials to build a plank on frame hull 5 feet long. the advantage to 1/4 scale is you can get some remarkably fine detail.
it is not always the case the bigger the scale the more detail you can achieve Harold Hahn and Lloyd McCaffery managed ultra fine detail at incredibly small scale.
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it comes down to planning the project and matching the scale to the project. First is the display area, if your space it limited that will set the size of the model. If your idea of a model ship is to show how wooden ships are built and the different types of joinery used the minimum scale would be 1/4. Pick a small vessel such as a colonial schooner that is around 50 feet in length that is a model of 12 inches so you can up the scale from 1/4 to 3/8 and the model will still be a reasonable scale of around 18 inches. At 3/8 scale the spikes for the planking is actually in scale. The smaller the scale the more compromises you need to make. Let's take the spikes used for planking, the smallest scale in order for the spikes to be used in a model is 3/8 scale anything smaller either the spikes should not be used, or they are grossly out if scale.
Consider the viewing of the finished model small scale is harder to see like trying to read the tiny list of ingredients on food packaging. Larger scale draws you into the model by seeing smaller and smaller details.
tricking the eye is why out of scale will work when you view the entire diorama or model. This is why out of scale treenails/planking spikes work on a ship model. You do not calculate the size of the dot to the entire model ship. Just like the horse in the foreground if you put it against the building the horse would be 12 feet high but in the overall setting you don'r see it that way.
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