OK, there is a lot of speculation in this thread, but do we know for sure that the 'sea' and 'rivers' are displayed when you are walking on the ground normally? My understanding of graphics programming in limited but normally things like this wouldn't get displayed at all once the engine has worked out you can't see it (the ground is in the way).
As for the airships, I agree they are not very high at all. If you go to the large pond near Emerald Moss and look north over the water you can sometimes see an airship pass by in front of the trees. It looks really odd.