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Reward: Mirabella as your wife
Defeat this boss monster and be the envy of every pirate with Mirabella as your wife, should you choose. I wouldn't recommend trying this until after completing most or all of the Western Islands quests first.
1 - Piratewoman Mirabella
Speak with Mirabella and go through her dialogue in any way you prefer, eventually choosing the option of seeking her hand in marriage. Even should you have a wife when you say this (which should have been scripted) there are no consequences, just the start of this quest. You'll now need to talk to Captain Wetbelly at #2.
2 - Captain Wetbelly
When you're ready, let Wetbelly know and then follow his ship to the correct spot on the eastern side of the islands to initiate the battle. As with most boss fights you'll need to focus your attacks and decide whether to use any of your army to take out the pesky creatures the kraken throws up onto the ship, or simply concentrate on doing damage to the kraken. It's not one of the more difficult boss fights in the game. When it's complete she might not be yours quite yet. Talk to Mirabella again and she can't give herself to you until Lucky James is dead. If he is, great! However, if you haven't already worked on the main quest Maps of the Underground
, now might be a good time. When the time is right during that quest, instead of negotiating, just fight and defeat him at his castle then return to your pirate lass.