When you see the circles, it means you can use your grappling hook, on the ship. Select your grappling hook from the cannon, by holding down right mouse button and selecting it. Then aim your grappling hook at one of the circles and try to get your grappling hook to land closer to them.
It will hold on to the ship and you can then go to the edge of the ship and the following text should appear: "Hit Ctrl to board enemy ship". You will then swing on a rope over to the enemy ship. Most times tere are enemies on the ships. If they are high lvl's, you might have a quick death.
