There are engineering size limits if you want it to be seaworthy. This is a constraint imposed by how well the materials used can tolerate the stresses that the ocean applies to the hull. For example, wooden ships can’t be much larger than 400 feet. The largest wooden ship ever made was the Wyoming, and it required many pumps to keep it afloat, because the constant twisting and bending of the hull would create gaps between the boards, allowing seawater in. It eventually sank in heavy seas.

https://en.m.wikipedia.org/wiki/Wyoming_(schooner)

Because the moon is perfectly* round, and the halo is created from the light being reflected (then refracted, as others have said) from the moon.

If you were able to see a halo around, say Haumea, for instance, the halo would be very oblong.

*The moon is, of course, not perfectly round. But, it is close enough to make the halo appear perfectly round.