So this world is mainly populated by humans, of varying backgrounds. The insular nature of the island worlds allows for great diversity in the way humans can look.
Elves are extremely reclusive in this world defending their islands to the death and rarely leaving their safety for the wider sea. Half elves are almost completely unheard of and any elves would need to hide their lineage to be regarded with great suspicion as the peasantry of the word have many lore and tales about how the elves will curse you if you look at them.
Dwarves are known for their ingenuity tending to live in great active volcano chains to fuel their forges. Known to be the very best shipwrights in the world dwarven cities are where the who’s who goes to get the very best ships. Even having created fantastic undersea vessels and airborne contraptions.
Halflings and gnomes are both fairly common sights amongst human cities. Halflings being famous cooks and farmers and Gnomes being known as wondrous teachers and doctors common aboard ships. There are a few islands exclusively populated by these races and they happily trade with humanity.
Orcs are rare in the world but less so than elves. mainly forming tribal nation states and happy to keep to themselves. once in awhile you will see a half orc and they are viewed as strong workers and well respected crew-mates due to their strong familial loyalty. They tend to regard their ship as their family and will protect them with their lives.
Merfolk are sometimes seen above the sea though commonly as slaves of some kind. Many seafolk are regarded with mistrust, thought of as cheats and scum by surface dwellers. They are a strong and caring people who have had a bad lot rolled to them. The deep seas are harsh as many great undersea beasts loom in the shadows.