Wood below the water = worm and soft spot damage, but you are right that 'rot' is normally a topside thing.
If you are unsure, I would get the hull surveyed prior by a good surveyor to check what you are getting into. You can get timber sheathed in glass which if it's done right is basically turning the boat into GOP.
Glass can be as problematic, osmosis as mentioned which is dissolving the fibreglass hardener in places basically. I agree with legs on moorings, but on the other hand they have been doing it for years with not a huge number of problems by stats. Just as many issues with shafts really...
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