Hún sagði að hún hefði aldrei séð svona stóran bát, þó að hún fari oft með ferju.

Hefði is the past subjunctive of hafa. Here it is used because the clause is reported speech after Hún sagði að ....

A very common pattern in Icelandic is:

• direct speech: Ég hef aldrei séð svona stóran bát
• reported speech: Hún sagði að hún hefði aldrei séð svona stóran bát

So hefði séð is the normal reported-speech form here.
If you used hafði séð, that would sound more like a straightforward factual past perfect, with less of that indirect-speech flavor.

Séð is the form of sjá used with hafa to make a perfect meaning.

So:

• hefur séð = has seen
• hafði séð = had seen
• hefði séð = had seen / would have seen, depending on context

In Icelandic grammar, this form is often called sagnbót. In more English-based explanations, learners often think of it as the past participle-type form.

Fari is the present subjunctive of fara.

After þó að meaning although / even though, Icelandic very often uses the subjunctive. So:

• þó að hún fari = although she goes / although she may go

This is one of the standard places where learners meet the subjunctive in Icelandic.

Because the tense in the subordinate clause is chosen by meaning, not just copied from the tense of the main verb.

Here hún fari oft með ferju describes something habitual or still true in general: she often goes by ferry. So the present tense makes sense.

In other words, the sentence means something like:

• She said that she had never seen such a big boat, although she often goes by ferry.

If you wanted to show that this was only a past habit, Icelandic could use a past form instead.

Because bát is the direct object of séð, and sjá takes the accusative.

So:

• nominative: bátur
• accusative: bát

The adjective has to agree with the noun, so it also becomes masculine singular accusative:

• stóran bát

And svona does not change its form.

So the whole phrase is:

• svona stóran bát = such a big boat / a boat this big

Here svona means something like:

• like this
• this big
• such a
• this kind of

So svona stóran bát can be understood as:

• such a big boat
• a boat this big

It is a very common Icelandic word, and it is indeclinable, so its form stays the same.

In með ferju, the word ferju is dative singular of ferja.

The preposition með normally takes the dative, so:

• ferja → ferju

The phrase fara með ferju means to go by ferry / to take a ferry.

A useful nuance:

• með ferju focuses on the means of transport
• á ferju would focus more on being on a ferry

So here með ferju is exactly what you would expect for by ferry.

Because this is a subordinate clause introduced by að.

In main clauses, Icelandic usually follows the verb-second pattern:

• Hún sagði ...

But after a subordinating conjunction like að, the word order is different:

• að hún hefði ...

Also, adverbs like aldrei usually come:

• after the finite auxiliary
• before the non-finite verb

So:

• hefði aldrei séð

is the normal order.

They do different jobs.

1. að after sagði introduces a content clause:

   • Hún sagði að ...
   • She said that ...

2. In þó að, the að is part of the conjunction:

   • þó að = although / even though

So even though both are written að, they are not doing the same thing in the sentence.

Because the clause after að needs its own subject.

So:

• Hún sagði = main clause
• að hún hefði aldrei séð ... = subordinate clause

The second hún is the subject of the reported clause. Icelandic normally does not leave it out just because it is the same person as in the main clause.

So the repetition is completely normal, just like in English:

• She said that she had never seen ...