Is there anything I can do to reduce unregistered hits (in the game's current state)?
Spoiler: Answer
A stable connection is the best way to reduce miscalculation errors and unregistered hits - and, assuming developers have the most direct, stable connection to their servers, this is likely the reason why they might be slower to recognize these types of issues.
Otherwise - in game - it helps to use faster projectile or splash weapons, or to get closer to targets before firing so there is less flight time to be miscalculated. Likewise, aiming for the mid section of the ship reduces your chance of a miscalculation or pixel variation causing an unregistered hit on the outer border of the target hitbox.
Unfortunately, the best thing you can do is accept that it's a part of the game (or all games some extent).
If it continues to bother you, I suggest using faster/more agile boats and items, and prioritizing attacking larger, slower boats to take full advantage of the unregistered hits they'll have on you and to reduce the number you'll have on them.
FAQ 2: SPLASH CIRCLES
Two things:
1) Even if all lag compensation calculations were perfect, the lag would explain some of the difference between the visual you see and the damage caused by the item.
Spoiler: Answer
Remember that everything you see actually happened in the past? When you see a projectile explode, keep in mind that the actual detonation took place a fraction of a second before; the actual fraction depends on your latency. It may appear that you've cleared the splash radius, but the damage was calculated at the server time it detonated - not when you see it explode.
Why can't they adjust the visual so it matches perfectly?
Prediction modeling of when and where things will occur before they happen is hardware intensive on the server and often leads to more inconsistent results (e.g. players would appear to teleport or skip each time the prediction model was slightly off, and small calculation errors would still cause inconsistent visuals for the exact moment of detonation). As a practical matter -- you're not likely sitting in a blast circle until the last second, so more accurate visuals aren't likely to reduce the amount of damage you take.
2) The splash circle isn't always accurate - by design.
Spoiler: Answer
Player are shown the splash radius at the time of launch .. but waves move .. as does exact location of the projectiles detonation.
If the splash circle is generated on the crest of the wave, then the projectile hits at a lower point, the projectile will have traveled further than the splash circle suggested - and vice-versa. Also, the further away the shot is launched, the flatter the flight trajectory, the greater the chance of crashing early, and the less accurate the initial projection of the splash circle. Why? All flight times are a set duration (unless they detonate early on a ship or wall).
In other words, you should view the splash circle as more of an "incoming projectile" warning rather than an exact depiction of where you'll take damage.
This screenshot was borrowed from a thread where someone took issue with the amount of duration taken from a FB. This screenshot is a split second before impact, but, you can see that the FB is not going to land in the center of the projected splash radius - even from this less than ideal camera angle.
Grenades are the best example of this. They have some of the most noticable, least accurate splash circles due to their smaller splash radius and more variable flight trajectory.
Random Side Note :
FBs, mortars amd napalm have different mechanics than explosive cannons and grenades.
Spoiler: More..
If a FB, napalm or mortar shot hits a wall or obstacle, splash damage is rarely recorded, whereas the grenade and explosive cannon still register splash damage after a wall impact. I haven't the faintest idea as to why (other than if some splash is calculated in two-dimensionally and some in 3-D).
Likewise, it's a curious choice to have mines and napalm disappear if they barely touch an overhang rather than deflecting or dropping into the water below .. Perhaps the physics calculations were too complicated to code.
Random Side Note 2 : Missiles users .
Have you noticed how your missiles are OP at times and utterly worthless at others?
Spoiler: More ...
If you've used them enough, you've probably figured out ways to somewhat reduce the randomness intentionally coded into the missile spread .. but I'm sure you've also seen perfect missile shots directly on target that do minimal or zero damage.
Why?
Missiles are susceptible to lag compensation errors (like all weapons), but there can also be lag compensation errors in the missile spread.
Other than seeing the targets take zero damage, the best way to see this is in the server replay. You may have had a perfectly tight missile grouping in your live version, but the server recorded 3 missile shooting off to the right and 2 to the left of the target for little to no damage.
Long story, short: The randomness coded into missile spread should be removed. It's fine to have a set spread that increases with range, or to reduce their damage if they're too powerful, but these types of compounding errors should be removed from the game.