I know its probley obvious but is the only advantage in having more than one ship in your fleet so you can carry more supplies?

Another advantage is if you lose a ship in battle you won't get stuck on some island for several months; you just switch to another ship. That's all I can think of.

There is another advantage: you can carry more men, so you'll get some good invasion task force.

and there is one disadvantage, you have less crew in your main ship.

1.) More men - good for city attacks
2.) More room for goods and supplies - sell them all in a wealthy town
3.) Having both a fully upgraded Royal Sloop and a Large Frigate is a good idea
4.) Treasure Galleons make great mules (140 cargo)
5.) as Quentin said
6.) if you have not enough men to man your main ship, you might want to sink captured ships: You will need a minimum crew on every ship, so you should take this in account if you have few men.

Standby attack ships should Flag get battered.