We live in a canal neighborhood in Florida. For 10 years we have been doing the Christmas Eve boat parade here in Riviera Bay in St. Petersburg.
The best way to get ideas for how to decorate your boat is to look at youtube videos of boat parades.
After you do that, the first rule is, do not put any bright lights right in front of your helm station. You need to be able to see! LED Light strings around the forward railings are usually fine if you have a pilothouse or flying bridge.
Think ahead about where you will put all light strings; for example, what if you need to deploy your dinghy in the event of a Man Overboard situation and you have lights wrapped all around your dinghy?
Measure, measure, measure. Write it all down, and then order online or go buy your light strings now. Do not wait until the last minute because the Christmas lights start selling out right after Thanksgiving. My favorite most durable lights come from this company:
Buy the lights with the dark green wire.
Get your boat lights installed at least a week before the parade. Then you have time to tinker with your display before the parade. You can also get all of your controllers set on the movement you want before you wrap the controllers for rain protection. Buy more lights than you think you will need.
If you want that "Oooh!" factor, you will want some lights that have motion. The most important thing with these is to protect the motion controller from rain. Remember, if it rains the water will run down a wire but not up a wire.
The biggest "Oooh!" creation that I have done was to run 25-foot LED color changing strings at a 60-degree angle up into the air off the stern. I cut down two 26-foot pieces of bamboo and attached the color-changing LED light strings on the bamboo with zip-ties. Then I put the bottom end of the bamboo poles into a firmly attached fishing rod holder, and I ran two stays to each bamboo pole. My stays are heavy twine. The poles sway a little while my boat is underway, and they make getting the fishing boat back up on the davits a bit of a daunting endeavor, but the "Ooohs" are well worth it. These color-changing strings are the C9 bulbs (the largest Christmas light bulbs) and I set them on the Chase pattern.
I wrap the controllers tightly in Saran wrap, and then put plastic bags with the end tightly taped shut over that. So far, no rain has made it into my controllers.
Oh, and buy lots and lots of zip-ties.
It's a blast to be in a boat parade. Have fun!