Regardless, as any object moves further away it will become less visible and that has nothing to do with the shape of the earth.
This is true, for two reasons.
1) Optical resolution, at some point you will no longer be able to discern an object. But so long as you have a clear line of sight to it you can zoom in with the right equipment to see it
2) Visibility. This varies from day to day, but there will be a distance at which visibility becomes an issue, in that case no amount of zooming in with optical equipment will render the object visible.
The difference between water and sky is a very tricky thing to discern most of the time.
It really isn't. Almost always there's a very clear line between them. Random picture from a recent holiday:
Is that clear enough for you? So here's the question - what causes that line? It can't be visibility, that wouldn't cause a sharp line between sea and sky. On a foggy day you don't get a sharp horizon, if the visibility is less than the distance to the horizon then it just fades out like in this picture:
And it's not optical resolution because
1) The sea is really big and
2) Zooming in doesn't reveal any more sea.
So what's with the sharp horizon line? RE's claim is that the earth is a globe and thus the sea curves away from you. That's why at some point you get a sharp line beyond which you can't see. That's also why the distance to the horizon increases with height, you can see further over the curve. What is your take on why these things occur?