I like all of those ideas. The one with the "deeper water the further you are out" is fantastic. I wouldn't want the map to resize, rather, I'd want it to move. The technical edge of the map would be miles out, and the sea, as you get towards these edges, gets deeper, more rough, there's more rain, there's rock islands (possibly with hidden packages?) and underwater stuff. Possibly there will be a clue, perhaps, ingame, that gives you coordinates for a sucken ship, and there's a hidden item there. It would be almost impossible to find without coordinates.
Which reminds me, coordinates plotting should come into play.