If we are travelling across different areas of water, but there is no formal 'border crossing' do I still need a passport?
Yes indeed. And all the guests in your charter party will need one too.
Whether you intend to cruise international waters or not, who knows where your cruise will take you — you may want to change destinations along the way - passports are therefore required for everyone onboard, and copies will be kept by the Captain and crew throughout the duration of your charter.
It is your responsibility for ensuring you have all the correct documentation.