About the passport, basically the answer is NO you do not absolutely HAVE IO HAVE the passport, but the cruise lines do strongly suggest that you do.
Currently the required identification is:
Either:
1. A Passport
OR
2. A government issued photo ID, like a driver's license AND an official birth certificate. (Either original or certified copy with the raised seal.)
I hope you don't mind a recycled answer, as I just answered a similiar question for someone else a few days back. So this is mostly a cut and paste of that answer:
Currently it is not essential to have a passport to go on a Caribbean cruise, or on one to Mexico. BUT, if for some reason you should have to leave the cruise mid way, and if you have to FLY home you must a passport to re-enter the United States when flying.
Also Currently the rules say you will have to have the passport for Caribbean cruises starting with the beginning of 2008. Who knows what the rules will actually be when that day comes, as they have waffled on this several times already. They seem to be able to change their mind at will.
One warning. Be certain you have enough time for the passport to arrive, before mailing away your birth certificate to get the passport. I beieve it is takiing asl long as ten to twelve weeks these days for passports to arrive.
If you have less than 13 (maybe more) weeks until you sail, I wouldn't risk sending away my birth certificate as you will need a certified copy of your birth certificate AND your government issued photo ID to board the ship, should you not have the passport.
Hint, if you have to order the birth certificate first, go ahead and ask for two copies. If you have one now, maybe order the second copy of the birth certificate anyway. Birth certificates come faster than passports. That way you might still have something to board the ship with, should the passport be delayed.
Also beware, that those fancy footprint birth certificates, that the hospitals issue MAY not be considered official. (Be sure to verify). Aside from that they are a pain in the butt to carry around. So ordering a certified copy is a good idea anyway.
One more note, I've recently read that at some post offices now require appointments, for applying for a passport. I know the post offices around here, only accept them during limited hours.