Hmmm. Well, this is what I've found out through play and other sources - First, using selfish DOES have an effect on Pirate happiness but it is nothing that having the right services can't counterbalance easily. If you decide to use selfish, keep your pirate service prices on middling or bargain. If you use miserly then keep your pirate services on bargain. The trick here is to make certain that the pirates can afford what you offer. Remember that you also have to keep a balance on expense vs. income or your treasury will stay in the red all the time. Also remember that anything that goes in the hoard, stays in the hoard. You can set it to maximum early in the scenario and turn it down to minimum after you get your hoard goal. Later, the extra treasury money can be used to address pirate happiness issues.
To a point, this scenario comes out to "where do I want my main income to come from". Cruising goes without saying but how much you get there vs. how much you get from pirate services is a balance that is directly ralated to how many pirates you have to keep happy. It is easier to get money through cruising early on but even later, getting money from pirate services requires the higher gouge 'em setting to be any where near successful. If you cruise early to get your hoard on selfish or miserly while servicing at middling or bargain and then swap off to generous/big spender with gouge 'em services towards the end, you should have little problem getting your desired win. All of this likewise depends on how much hoard you want to carry into the next scenario. Getting the minimum goal and changing the stash to minimum will mean less carry over money.
The less pirates, the easier to keep them happy BUT also the less pirates, the harder to make money. I didn't build but two schooners, (on top of the ship given for 3 - [lost one for one more built - total 4])kept my pirates to as bare a minimum as possible (full crews + about 10% of crew whole number as lubbers - about 60-65) and tried to keep my cruising in places where one country or another wasn't teeming but the treasure levels were still better than minimum. Balance stuff out to get your hoard first, then concentrate on building your treasury to the point where in the end game, you can do as Clever Duck suggests and throw parties etc. to capture your last needed happiness for victory.
There is a lot of luck needed for cruising here because one sunken ship can really screw things up, not only in lost treasure but in pirate numbers as well. You must have at least 50 to win, as the scenario points out. If something wrong happens (like a sinking) near the end game, remember that you can press every captive you have in a bind. Recruits are NOT important in this scenario except to meet the minimum 50 requirement. As such, don't worry about running under selfish or miserly.
I played this one twice and best I best I did was a silver. Both times I still had time on the clock (not much) that might have (with another successful cruise or two) tilted the balance. I could have played longer but I threw parties to end it quicker because I wanted to move on to the next scenario.
Once you have 50 pirates and the right happiness (about 61-66%), you win and the victory movie plays. Like most of the scenarios, keeping as close to the goal as possible will usually pay off if you do not allow yourself to be thrown off by concentrating on non-essential stuff. In this one, for example, building forts, rum distilleries, cigar farms etc. is unnecessary as long as you have beer, wenches and gambling that is in keeping with the overall level of your pirates.
I have a suggestion that may work. To keep pirate levels down, try rotating Captains and crews when you cruise. Let a Captain get up to about 5th level and then, instead of sending him out again on cruise, fire him and let another, lower level, Captain and crew have a shot at it with the same ship. Your first Captain and crew will spend their money down while the second Captain (hopefully if he doesn't sink) and crew brings you more money. As the first Captain and crew spends money (if they have no hoard - stay away from building a lot of houses in this scenario) they go DOWN in level. If you watch things closely enough, you can guage when its time to swap the Captains and crews again.
I know that I only got to silver but I didn't get a chance to try this particular idea in this scenario. I think that it will work as long as there are enough services but not too many. In my games I used an average ratio for services. This was 3 wench shacks, 1 gambling den and 2 animal pits to each dive. I set levels to 1-3 for most with just enough 3-5 to accommodate monitored pirate level rises after cruises.
All in all, you do not need more than 5 dives to take care of everyone by slot count but rotation makes this number less. I used 3 dives, 2 at 1-3 and 1 at 3-5, setting it back to 1-3 when needed (when I lost a ship I had to press - the extra pirates were 1st level). This, by averages, leaves room for 9 wenches, 3 dens and 6 animal pits. I had more wenches and less dens/pits because wenches can only take care of one pirate at a time. As large brothels only start at level 3-5 (or is it 4-6?), they are not needed here if you keep pirate levels down. 5 extra wench shacks work just as well AND can take care of level 1-3. Remember - you only HAVE to keep 50 pirates happy. Anything in numbers over 50 is extra work for YOU. You should be able to build ALL of your services for the entire scenario by 2nd year (or earlier depending on lumber/captive builder input) if you do it right. (Builders with nothing to build make great pirate service employees - empty your construction tents when you are done building.) Keep on top of pirate spending and change level settings as needed.
I also think that 2-3 small ships is a key to winning this one rather than using larger ships that cause your pirate population to swell. Keep to the goals!
I'm sure I missed a thing or two but I'll throw it in later if I think of something pertinent. I will probably take another shot at this one soon and I'll let you know what happens.
For my part, I really want to try the crew rotation thing. It worked in a couple of the other scenarios for me but I'm sure I did not notice the connection to this particular scenario until after I played it. I think it could really be a factor in the bronze/silver vs. gold without requiring a change in stash setting. Oh well, guess I'll have to try it and see...