Ethelred Unread, you got boarded in VH level ship combat and you're surprised your crew lost? You do realize that the AI gets massive melee bonuses in VH? At VH, your crack crew vs their crew is like a group of peasants vs a bunch of elite armored knights at that difficulty. If you want sanity in boarding, try "normal" difficulty, so the AI doesn't get huge morale and fighting advantages over you (and you don't get big morale hits that cause your guys to rout quickly).

As far as the tactic of boarding a big ship with a small one, it's a viable tactic for human vs human too. Due to the fact that the boarding action ties up the attacked ship, it is a great way to sacrifice a lesser unit to stall the enemy's ship so you can hit him with something more powerful. As far as the realism? Dunno, but we have examples of small ships stopping big ones regularly off the Somali coast these days :)