The Open Boat

In the book Crane states that "... it required a searching glance to discern the little black figure".

If it the man was so small how could they go into such detail or were they just hallucinating him and and convincing the others to see what each man was seeing?

A hallucination is a possibility. A shared interpretation of events may also be likely. Your point picks up on Crane's intentional vagueness. The larger point is that the reader feels what the men on the boat do. They feel the universe is turning to the absurd. They are desperate to be noticed and once they feel they are noticed help does not come at all. Crane is playing against the tendency of humanity to interpret their situations subjectively. The fact that they are in trouble would lead them to believe that all of the universe would work towards saving them.
This goes towards the theme of perspective.