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Vessel is a catch-all term, like 'watercraft', which describes any floating object used for the carriage of people or goods. Generally smaller and less complex vessels are 'boats', whilst larger and more complex vessels are 'ships'. As a general rule, you can put a boat on a ship, but you can't put a ship on a boat.
I thought it was because the difference between ship and boat.. A boat is a small vessel that can be carried aboard a ship.. Like whale boats, patrol boats, skiffs, etc. Originally submarines were small craft that were carried by and launched from ships. Today's submarines however are too large and would never be carried by any ship. I was on a pier once, discussing this issue with a Navy officer, as we looked at the 560 ft long Trident submarine in front of us.