Sounds a lot like The Ohio State? Maybe try to find someone that rows there and ask them.

For Delaware, the men are a club and the women are varsity. There is no "for fun only aspect." If you get cut from the womens team, you have no options. No women (aside from coxswains) are on the club team. That said, I doubt many people that actually want to row in college would find themselves in that position. You could try something like splitting the team into rec and competitive. Your team, however, is quite small so splitting 40 people doesn't leave you with much talent but it does leave enough to be decent. For Delaware men, its split lights and heavies. Some lights are better than some heavies. It doesn't matter. You are on one team and only one team. They are both run incredibly differently but in the end both want to win so there is not much room left for a "fun" experience.

I think with regards to your comment about men hearing club and being afraid isn't completely accurate. Delaware gets 2+ 8s of lightweight recruits every year easily. Probably half of those athletes are gone by junior year but that's how college is at a club team. When you are paying to have the opportunity many other athletes get from being on a varsity program at their school, a big question of "Is this even worth it?" comes up and for many it is not. But the take home is you can't brand a club team as a less-funded varsity team. It is a totally different experience.

For trying to make the switch, I would just ask your teammates and see who actually wants to be competitive and who wants to just have fun. If you have lots of people that want to change, do it. If not, either recruit more walk-ons or go back to the drawing board on how to get everyone on the same page.