Ben, read through those sites that Splid linked. They do in fact have all the answers.
But in brief... those bars are not health, they're people. each sailor has X number of recruits (red), X number of elites (white), and X number of veterans (green). As you go up levels, you can hold more, which is what the RCT button does, it fills your sailor up with recruits.
Recruits take up space and can eventually become experts (every time you score a critical hit or shoot down an airplane, one gets promoted). They otherwise do nothing. (Unless you have less than max numbers, then there's a skill penalty. So keep them full.) Elites are where your crew's skill actually comes from. Veterans are worth 4 times as much as elites, but you don't get them automaticly. Read the articles to find out more.
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