Stacked ships will defend each other, like artillery it fires a defensive shot. With a lot of small stacked "fleets", you can place them at choke points on the map and sink whatever AI comes by. Dont know if its the most effective use of resources, but its fun at least.
Battleships are expensive, but they last a long time and can get to the enemy territory quickly and destroy his expensive improvements and buildings. Especially good if you dont plan to take the territory, but you want to rip it up.
On certain maps they can deny a resource to the enemy, if you can take out the roads at a chokepoint to the resource or harbor. Of course artillery can do that too, but they need a transport and protective infantry and do less damage per turn due to the time it takes to move them into position. In the ten turns it takes to move the artillery into firing range for example, the battleships may have already done eight or nine turns worth of damage. If you include a transport with infantry and artillery in you battleship fleets, then you can really bring some firepower to bear rapidly.
You cant place Battleships on defensive terrain, but you can stack them, screen the big fleet with smaller ones, and add carriers with fighters to defend against air attack, and submarines to protect against that threat.
I love navies. They give you more options, the ability to react quickly, and act as early warning radar if you position them carefully.