A bitt is a wooden or iron post fixed to the deck of a ship. It is meant for fastening cables or belaying ropes. When a rope is played out “to the bitter end” there is no more to be used – thus the modern meaning of following through to the end, whatever the consequences.
A sheet is a line used to control a sail, and having loose sheets can cause a ship to rock about drunkenly. Before “three sheets” became the standard usage of this idiom, drunkenness was ranked from “one sheet” or slightly inebriated to “four sheets”, meaning unconsciousness.
“Down the hatch” is a phrase drawn from the loading of sea freight, where cargo is typically lowered down into the hold of a ship through the hatch. As a drinking expression it first appeared in the early 1900s and is often used as a toast.
Jolly Roger is the name given to various flags that were flown on a ship to identify the crew as pirates. The most recognized version depicts a skull and crossbones (like the one above.) It was intended to frighten victims to surrendering without a fight, as pirates were not bound by the usual rules of engagement and would likely fight to the death.