While popular view, supported by some tacit agreement from church and scientific dogma, maintained that the earth was approximately flat many seamen, all the way back to the time of Aristotle the more knowledgeable sailors tacitly understood that the earth was round. This was understood in part because any competent observer, a requirement for survival at sea, would note that the tops of other ships mast appeared long before the ship itself became visible. Many ships carried bright flags or banners at the top of the mast so they could more easily stay together. Traveling in groups was an advantage on a oblate spheroid.

The appellation of "there be dragons" was often understood as a general term indicating that the area had not been explored, mapped or contained shifting hazards. To this day ships are in danger in areas like the western tip of Africa because the shifting sand bars reach well out to sea.

Even taken more literally it is not too much of a stretch. As the wreck of the Essex, which was sunk by a whale in the 1820s, shows there were indeed large potentially dangerous animals. The many unmapped reefs, isolated rocks and dangerous tides were every bit as scary a any dragon. Particularly for the many western ships that were square rigged and couldn't sail against the wind.

Caught on a lee shore they were largely incapable of 'clawing off' in a storm at best they would drop anchor and pray. In calm weather they would either anchor and wait for the wind to shift or row off using the long boats. The universal bane of sailors through time has not been the ocean so much as the land.

Of course, into the 1700s, crews commonly faced malnutrition or even starvation after a couple of weeks. This was one of the reasons ships often tried to stay near the coasts. The other being much easier navigation.