The five small ships attached to the towered flagship were not just decorations. They fired at Cipher Flight's guild navy that was approaching, using cannons and water guns. The water guns shot high-pressure water like those used by real-world firefighters. But unlike their real-world counterparts, these water guns were used to deal damage instead of saving people. They also delivered high knockback effects to their targets.
Water Lily spread her navy so the ships could enter from all directions. Their ships received heavy damage due to their forceful advance but they ignored it. What's important was boarding the flagship.
All the while, the allied ships sent bombardment to the enemy flagship from outside the fog. Their bombardment was stopped by the shield protecting the flagship but the flagship still lost some HP and the tremor caused by their bombardment disrupted the flagship from accurately targeting Cipher Flight's ships.