I haven't studied physics since I was 16, an awfully long time ago, but I confess that I am astonished at the heavy weather being made of this subject!
The diagram posted is very similar to the one I was about to post, which is attached. The light travels from the blob at the prow of the boat, is reflected off the water and reaches the eye.
You can see the inside of the boat. It is not an illusion. The light travels from it, isn't blocked by the rear of the boat, bounces off the water and reaches the eye, just as it does from the prow.
As I wrote in my first post on this topic, the reason Dave is confused (and his confusion seems to be afflicting others as well) is the misconception that the reflection you can see is real, that it somehow exists in the water below the boat. It isn't and it doesn't. It's a virtual image.
Look at the photo of a train on a bridge (I put a link in my last post in this thread). It makes the situation even clearer.
Jeremy