You made me curious, so I skim-reread the whole thing, and, yeah. The guy is clearly, as you say, either bullshitting or out of his tree. I'm not surprised the Wedge Rats rolled with it in the moment; they meet Wolfgang right after a long journey on a ship way too small for how many people were aboard. 200 people, one working shower, no laundry facilities, toward the end they're surviving on vending machine snacks and running out of those. I think my own reaction would have been along the lines of "as long as there's a bunk and real food on offer I'll believe anything you say."

In the longer view, whatever is actually going on in his head, von Fahrvergnügen has been profoundly and consistently generous to everyone in the WDF, and his deep pockets and his shipwrights' skills are real. Complaining that it's been 400-plus years and this mysterious First Evil that he needs a space navy to fight has never materialized (unless that was Twilight, but I don't think it was?) would be churlish.