I had a slightly different version of this (though the scale is the same, it was one of these two-masters they keep reformatting), and it was invaluable to my childhood. I had a small river/large creek near my house and I would take it down there and float it.
Not that long ago, I found the playmobil sloop at Target on sale for twenty (it's usually around thirty) and replaced the sails with canvas, put on some guns, and relaid the deck with balsa strips. It was a great basis for a medium-sized ship... this one, with modifications, would be perfect for a galleon. You could stage most of the game on the deck, I should think.