I add numbers to your sentences, and omit »jetzt«:
- Wo fährt das Schiff jetzt hin?
- Wohin fährt das Schiff jetzt?
In (1) »hin« is not a part of the interrogative word »wo«, but a part of the verb »fährt«. You can see it, if you put both sentences into future tense. (The infinite verbs are marked bold, the finite verb is in both sentences the auxiliary verb »wird«):
- Wo wird das Schiff hinfahren?
- Wohin wird das Schiff fahren?
»Hinfahren« is a separable verb that best can be translated as »to drive-to« or as »to go-to«. English doesn't have separable verbs, nor that is have an exact equivalent of the interrogative word »wohin«, so this translations of the sentences is not correct English, but it reflects what is going on in German:
- Where will the ship go-to?
- Where-to will the ship go?
- Where go-tos the ship?
- Where-to goes the ship?
But when in German a separable verb is split, then the former prefix doesn't stay next to the verbs core. Instead it moves to the very end of the sentence.
Read more about separable verbs on Wikipedia.
There is also a small and very subtile difference in the meaning:
- This questions asks for a place (»wo«). It asks for the place, to which the ship is moving.
- The second question asks for a direction (»wohin«). It asks for the direction into which the ship is moving.