Thanks for the pointer to gel filled cables.
Which deals well with capillary action between the copper and the insulation... neatly introducing a new area to plan for, and worry about 
I found several links to CAT5 and CAT6 flooded cables, even speaker cable - and mostly for sale in full rolls. This seems like it would be best, but the prices where out of my budget.
This would be a good place to ask if anybody knows of off-cut lengths of flooded cable for repurposing?
I also found suggestions to terminate wires with heat-set-glue inside heatshrink cables. This is apparently called 'flooded heat shrink' in the US.
This is affordable. But I think there would be practical issues that need care to work around ..
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it should work pretty well for solid core cables - as the outer surface of the cable is all the glue needs to reach - but solid core cables are not so flexible - and subject to fatigue. So I dont think I will be using them.
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for stranded cable the glue would need to soak all the way into and between each strand - which sounds unlikely.
Aside: I recall from wiring instructions for cruising boats that you should use 'tinned wire' because it does not corrode. And that you should use multi-strand wire to avoid fatigue due to motor vibrations. I have only seen it in ship chandlers - and it is quite expensive and in gauges a bit too large for a model boat:).
The above sounds like i should have flooded cable as best choice, and if I can not afford it, the it gets pretty uncertain.
Perhaps, rather than stop the water doing its capillary thing by the above it would be simpler to keep the water away from gaps in the insulation...
To do that, as much as possible the wires are run from inside a spray proof housing to inside another spray-proof housing, with no joints outside where the water is free to move.
Where a joint is required outside a housing cover the joint with hot melt glue and heat-shrink tubing, so the copper is not expose to the water.
Sounds simple.
Will probably not work so well when the boat capsizes; so should use heatshrinking and glue on the ends inside the housings as a limited form of insurance if the turn-turtle case ends out with water in the casing - even though I know it wont be perfect.
Dave