For those who don't know (ahm...), this is the "ulti" skill of Captain CoCo aka Kunkka aka Captain Obvious aka Daelin Proudmoore aka The Admiral. :D

Skill Description:

The admiral summons the mythical ghost ship S.S. CoCo to the battlefield. Allies are doused in Captain CoCo's Rum, inebriating them for 10% bonus movespeed and numbness to incoming damage, causing them to feel only half of the pain now and half after the Rum wears off. Enemies, pirates and scurvy knaves are dashed on the rocks for damage and a brief stun when the ship crashes.
Effects: 300/400/500 damage, 10% movespeed bonus, half damage now and half damage after the skill wears off.
Cooldown: 100 secs. at all levels
Mana Cost: 150/200/250.
Duration of Rum: 5/6/7 seconds.

Mechanics:
- Allied heroes through which the ship passes get the "rum buff". It's animation shows bubbles coming out of the hero's body.
- The movespeed bonus lasts for 7-9/8-10/9-11 secs. (Yes, it is variable!)
- The ship crashes 1000 range in front of admiral. Only those enemies who get caught in the crash AoE get damaged for 300/400/500 magical damage which is blocked by magic immunity.
- The stun duration is 1 second.
- The skill delays damage taken in rum duration. I've explained more about this under "How damage reduction works?"
- Provides vision in the area it passes through for 4 secs.

Where does the ship crash? What is the stun AoE?
The ship crashes 1000 range in front of Kunkka. Though the ship is kinda rectangular in shape but the crash area is actually circular with 425 AoE. See the picture below (click to enlarge). Sorry for the bad quality of the picture...

How the damage reduction works?
It's not actually damage "reduction". The rum just postpones half of the damage to be dealt later on us. The damage dealt later is direct HP removal and cannot kill the hero, always leaving at least 1 HP. Also, this damage is unavoidable/cannot be evaded by avatar or spell immunity.
The rum postpones every kind of damage be it magical/physical/pure... EXCEPT DIRECT HP REMOVAL (from skills like Warlock's Fatal Bonds).
The skill is based on pseudo-evasion that heals before damage is dealt. Consequently, damage received at full HP is not reduced at all. This also means that if you're using other pseudo-evasive skills along with this, you'll receive lesser damage in the duration of rum. For example, a Spectre with full leveled dispersion will receive only 30% damage during the rum duration.

Not so important facts:
- The ship spawns 1000 units behind kunkka.

- Ghost Ship and Refresher Orb:

You don't need to think much about it. Just see my example below and you'll understand what happens when we use Ghost Ship - Refresher combo:

Duration of rum = 5 secs. (i.e. Skill at lvl1)
(Forget about spell reduction/armour)

t=0s, 1st ship casted
t=1s, hit by 400 damage nuke, will experience 200 hp loss.
t=2s, 2nd ship casted
t=3s, hit by 600 damage nuke, will experience 0 hp loss.
t=4s, nothing
t=5s, will experience 200 + 300 = 500 hp loss.
t=6s, nothing happens
t=7s, will experience a 300 hp loss.

The above is correct assuming you were never at full HP nor at 1 hp during the complete scenario.

Credits:
Special thanks to antiweltteilchen for helping me research in this topic. (Without him this post wouldn't have been possible)
DA-Wiki
Robzor (He's always involved anyhow :D)