What is the use of building boats?
The difference is in the ships and number of troops.
Naval troops are fewer than their land equivalent, making them weaker as a result. However, naval ships are far more powerful than transport ships and also come in several variations.
Some of the ships can destroy an enemy transport by ramming it only once even frontally, others can be particularly fast, allowing you to flee from or intercept any transport ship. Also, siege ships built in the harbour actually have siege weapons. A siege transport on the other hand only transports the troops that man the siege weapons, making land siege units pretty useless in naval battles; similarly, a cavalry transport only contains the riders, not the mounts; such ships cannot be built however and only exist as transports.
TL;DR
Transports:
- Have more troops, and are therefore more suited for boarding.
- Have weak ships, and should therefore avoid being rammed.
- Do not allow the use of siege weapons or mounts, which need to be protected at all costs.
Military ships:
- Have stronger and faster ships, making them ideal for ramming or hit-and-run tactics.
- Have special skills, which transports don't.
- Can use siege weapons, giving them a significant advantage over very long ranges.