second, I've never had a pirate actually come and attack me. are you sure you are playing the same game?
indeed, never seen this either, even though i always play with pirates on...
I have yet to use the bounty feature... Has anyone else tried it?
Yes, but it doesn't seem to have much effect on the actions of the AI's. Putting a huge bounty on a player doesn't make the AI attack him significantly more. It does however give the attacking player more money. Haven't really looked into the issue of "Is the bounty per ship balanced" or anything.