Template{{Ship}} creates a wikilink to its articleand formats the visible name correctly. That is, it handles both parts of[[targetpage|label]]. Now it is up to the editor (you) to get this right: a bluelink to the article, and well-formatted ship's full name.
The ship'sarticle may be titled:[[HMCS Kootenay (H75)]] →HMCS Kootenay (H75). The three parts are called: prefix, name, ID (ID isWP:Disambiguation, or hull number, pennant number, launch year: to identify the ship when multiple ships have the same name).
Apart from the article title, in the visiblelabel the name could be formatted. Like:[[HMCS Kootenay (H75)|HMCS ''Kootenay'']] →HMCSKootenay (note theitalics, and the omission of the hull number – linked to the same article).
HMCS Kootenay (H75) (no wikilink, setting{{ship|HMCS|Kootenay|H75|wl=no}})
Prefix in/out option
Parameter|up=yes (forunlinkedprefix) can be used to have anunlinked prefix:. When set to "yes", the template will display the prefix before (outside of) the wikilink.
Examples
{{ship|Japanese battleship|Yamato|up=yes}} → Japanese battleship Yamato