Install a number of sheet styrene bulkheads inside the hull before putting the deck on. The bulkheads do not have to be super precise, just good enough to keep the hull from deforming.
With the bulkheads in place, I'd install the main deck in its entirety, just to add rigidity to the hull. Now, that means any mods the deck needs for wood decks or the like need to be executed first, or to a point suitable for the manhandling that cuttign the underwater body off will ential.
After that, it's go slow and carful along the cut line.
You always want to cut off the least you can get away with. I would cut no higher than the bottom of the boot topping. You can always build up the water effect, or sand the cut hull edge down a bit, to need.
Unless you are planning a stormy sea, you will want almost no list nor pitch in the hull (down a tiny bit by the stern ok, if underway).
A moored diorama offers a lot of options. Like setting out boat booms and te like; companionway stairs over the side. You also have to decide about sun awnings, too--which add visual interest, but hide detail.