Ok, this may be really dumb on my part, knowing that if I sell my
house and carry the note and it defaults, I know they can't take the
house somewhere. But I've been offered a monthly plan with 15% down
on my $17,000 Regal. Payments for 4 years with 6% interest.
The person is a professional with a good paying job

Then he should have no trouble getting a loan for something as little as
$17k.

and I have
everything from him to check such as personal references, work
references, and rent references.

He claims he's been a victim of identity fraud

So have him produce the police report he filed on it.

and thus unable to finance through a bank.

Then pull a credit report, pay for it if needed. The money it might cost
will undoubtedly be less than the suffering later.

My gut feeling is the guy is ok, my daughter says no. She says let
him fix the current financial problem, wait 6 months or so and if I
still have the boat, get him to try financing with a bank.

Sure, if you have no immediate need to sell the boat then let him do
something intelligent like opening an account at the bank and making regular
'payments' into it. If he can't set aside the money meanwhile, who's to say
he'd be consistent with payments later? It'd be his own account, not yours,
so there's no 'risk' to him other than being responsible.

Besides, it's 6 months, not forever. If he can't wait, well...

Anyone out there with an opinion? And yes, I would keep the title.
But there is the chance that he could just motor on down to Mexico or
whatever, right?
How easy is it to get away with boat theft? Do the hull numbers mean
anything? Could one simply trailer it to another state and get some
kind of registration?

As has been pointed out there are plenty of ways someone in possession of
the boat could cause you headaches. Don't put yourself in that position
unless you're really prepared to be a hardass about punishing him if/when he
tries screwing you. Most folks sensibly seek to avoid that sort of risk.