1. The ships are neutral until you activate the territory, then they become yours.
2. Yes
3. Yes they are at war with UK. You be hurtin if you don’t attack UK on Italy turn 1. If you play it right you can push the UK navy right out of the Med.
That was excellent. Great work. I am guessing there are no toddlers in the house! I can see why you could just stand and stare at it for hours. Beautiful.
Make sure you go to historicalboardgaming.com to get the latest rule revisions. Feel free to suggest any problems with the game you may run across no matter how small. All feedback is welcomed.