Trouble with water/terrain and creating a cave for docking

[nes89 0]

So my buddy and I are trying to build a cave to dock our ship(1st screenshot) but finding it hard to get the water to properly fill the cave. When we pull the ship in, it doesn't float in the water but above it (2nd screenshot). We noticed there is like little "air bubbles" under water in areas left over from shovel,pickaxe, and mining gun work that seem to block water from coming in. We found the best way to get ride of those was blowing up powder kegs but it seems the water still doesn't flow in enough. While building the cave we noticed the surrounding coast was drying up and the water was going out and creating little "waves" that seem to hold up the water in the ocean(3rd screenshot). So the question is, why is the water not filling in properly, why is the surrounding coast drying up next to an ocean? Should the water not stay where it is and more flows in from the ocean to the cave? Thanks for any help and if we missing something obvious or has been addressed before sorry.