One thing I just remembered that I'd like to add to the points made by So Boerd:

Converting ships in the last 1861 posed some problems. People were able to convert their wooden ships into Ironclads and build up some crazy fleets. So maybe this time around we should make it so that you can't convert wooden ships into Ironclads. You have to make them from scratch. I don't know if we should allow wooden ships to be converted into screw-frigates though, but at least Ironclads should have to be built from scratch.