La boato, kiun ni volas rezervi, estas pli malgranda ol la ŝipo, sed ĝi estas bona por nia familio.

Because kiun is the direct object inside the relative clause.

The full relative clause is kiun ni volas rezervi = which/that we want to reserve. In that clause, ni is the subject, volas is the finite verb, rezervi is the infinitive, and the thing being reserved is kiun. Direct objects in Esperanto take -n, so kiu becomes kiun.

A helpful rule is this: a relative pronoun gets its case from its job in its own clause, not from the noun it refers to.

It is a relative clause describing la boato.

Literally:

• la boato = the boat
• kiun = which/that
• ni volas rezervi = we want to reserve

So the structure is:

La boato, kiun ni volas rezervi, ...
= The boat that we want to reserve, ...

In natural English, which or that both work here.

Because Esperanto normally uses commas to separate subordinate clauses from the main clause, and a relative clause is a subordinate clause.

So:

• main clause: La boato ... estas pli malgranda ol la ŝipo
• inserted relative clause: kiun ni volas rezervi

The commas show that this part is inserted into the sentence.

Malgranda means small.

It is built from:

• granda = big, large
• mal- = opposite

So malgranda is literally the opposite of granda.

Then Esperanto makes comparisons with:

• pli = more
• ol = than

So:

• pli malgranda = more small
• pli malgranda ol la ŝipo = smaller than the ship

Esperanto usually does this instead of changing the adjective itself, so it does not make a special comparative form like English smaller.

After volas = want, Esperanto uses the infinitive form of the next verb.

So:

• volas rezervi = want to reserve
• rezervi is the infinitive, marked by -i

This is very similar to English want to reserve.

If you said volas rezervas, that would incorrectly use two finite verbs together.

Ĝi means it and is used for things.

Here, ĝi refers to la boato. So:

sed ĝi estas bona por nia familio
= but it is good for our family

Esperanto does not assign grammatical gender to nouns the way some languages do, so a boat is simply ĝi.

If a speaker wanted to avoid any possible ambiguity, they could repeat the noun: sed la boato estas bona por nia familio

Because bona is a predicate adjective after estas, not a direct object.

In Esperanto, adjectives take -n only when they are in the accusative and agree with an accusative noun. Here, bona describes the subject ĝi, so it stays in the basic form:

• ĝi estas bona = it is good

Compare:

• Mi vidas bonan boaton = I see a good boat
  Here bonan has -n because it describes the direct object boaton.

Also, bono would be a noun meaning goodness, so that would be a different word entirely.

Because por is a preposition, and the noun after it is not a direct object.

So:

• por nia familio = for our family

There is no accusative -n here. In ordinary Esperanto, prepositions like por already show the relationship, so you do not add -n just because English has an object after for.

Also, nia agrees with familio:

• singular: nia familio
• plural: niaj familioj

Because both nouns are presented as specific, identifiable things in the situation:

• la boato = the boat
• la ŝipo = the ship

Esperanto has only one article, la, which is the definite article. It does not have a separate word for a/an.

So:

• boato can mean a boat or just boat depending on context
• la boato specifically means the boat

Yes. In this sentence, kiun can naturally be translated as either which or that in English.

So these are both good translations:

• The boat which we want to reserve...
• The boat that we want to reserve...

Esperanto does not make the same distinction English sometimes does between which and that in relative clauses. Here, kiun simply introduces the clause describing la boato.