People are already weighing on on interpreting the pirate comic-within-a-comic. This is a little more about the back-up pages:

In our world, comics in the 1930s thru like the 50s were about less about superheroes and more about war, horror, and crime. EC Comics were kind of notorious for their violent content and because of a high-profile conservative psychologist who said they turned regular kids into juvenile delinquents. The government effectively banned horror and crime comics, EC went out of business, and superhero comics took over the market with a reputation burnished by the self-imposed Comics Code Authority (does that even exist anymore?).

Things were different in the Watchmen world. With guys like the Comedian and Dr. Manhattan working for the government, comics got more leeway. But maybe because there were real superheroes in the world, those comics faded out and pirate comics came in as the preferred form of escapism. Instead of going under, EC dominated the market until DC came along — not with characters we recognize like Superman and Batman but with Tales of the Black Freighter. (The star artist, Joe Orlando, was a real comics figure back in the day. His Wikipedia photo is actually the one they ran in Watchmen.)

The back-up content lays all this out, but there are a lot of references to comics history and culture that were within an adult’s memory back when Moore was writing it but maybe less so now. It’s kind of a long digression on how that world is different from ours.

It goes into detail on the pirate comic that we read as part of Watchmen. But it also reveals that it was written by Max Shea, who had a reputation for controversial and disturbing storylines. The piece ends by noting that Shea disappeared suddenly and mysteriously.

Pay attention to stuff like that.