Appears to be the signal flags for M and V. Could be a lot of things. Builders initials, place initials, something else. Does it ring a bell?
Other than that the ship looks to be done by some one with experience in the craft and of sailing ships. The rigging appears accurate and the scale is pretty close.
I can't tell what ship it was exactly there is a yacht Hussar IV that visited the Florida Keys in the 1920s that has the same sail pattern but the hull color wasn't white. Could have been another ship or a generic representation.