I believe this is calculated as (total attack + total defense) + (total hitpoints / 10)

Even ignoring the hitpoints piece, the Drath ships will have a combined attack of around 5000, whereas your total attack and defense add up to about 2320.

I can't give you "the right number" of ships to have in a huge game as it will depend on your number of planets, the AIs' fleets, which ships you use, etc.
Maybe helpful: your fleet should be sufficient to:
-  take on an enemy fleet (or more than 1, in case you get caught up in a war versus multiple AIs)
- defend your borders to prevent any of your planets being invaded. An example: put 1-2 defending ships on each planet, more on border planets and in addition have a few strong, big enough fleets at your most important borders
- as you noticed, give you a sufficient military rating: you won't be able to impress other races with a handful of super ships if they have huge fleets
In fact, if your economy can support it, the bigger & stronger your fleet, the better.

Some ways to improve your military rating:
- Build a spin control center (don't know by heart whether the Krynn can build this; you should research the Majesty tech all the way to the end to get access to the SCC) which multiplies the military rating of all ships on that planet by 10
- Build military starbases near your biggest fleets; with the right add-ons, these will give significant bonuses to the ships in that fleet
- Churn out a lot of decent quality ships with not-too-high maintenance. They won't harm your economy as much as ships with more expensive components. They can also serve as first defenders against small transport fleets that invade your space.

Actually, hit points is /4, not /10, and it's per ship, not totaled.  But you're right-we were told it was /10.

Then there's depreciation per ship...

Did you want an exact formula?

Each ship:
trunc (attack * (racial attack bonus + 1) / 100) * 1.25 if in orbit (round this part up) + attack from SBs
+ trunc (defense * (racial defense bonus + 1) / 100) + defense from SBs
+ trunc (hp/4)
*5 if in orbit of an SCC

Ship depreciation:
100/(number of ships with attack + 1) * 2 ^
(1 + 0.75 * (log (number of ships with attack +1),2) -1)
/ 100

Military might:
trunc ((sum of ships' might) * (ship depreciation) * 2.1022411)

I'm sure someone will let me know if I missed something. 

And that's a log2, in Excel format.

SCC is available to the Krynn, from Total Majesty, but it only applies to up to 10 ships orbiting the planet in question, and it only increases the effect those ships have on your military might to 5x, not 10x.

Provided all 467 Drath ships are attack ships (i.e., no constructors, colony ships, transports, whatnot running around, and no ships with only defense, as the AI is sometimes apt to do, which don't contribute to military might -or- score), the Drath have a military might of 2761 (tinies), 3012 (smalls), 3765 (mediums), or somewhere in between (mixed).  Notice this is without any racial bonuses to attack or defense (military resources add -both-).

You, on the other hand, have a rating of 2529 (tinies), 2568 (smalls), 2687 (mediums), or somewhere in between (mixed)

You're competitive, you're just not competitive -enough-.  Furthermore, the AI tends to attack you unless you're significantly more powerful than them-it's good to have 3-5x their military might, but it's better to have 10x+ their military might.

You'll roughly double your MM by raising your number of ships to 100, and 125-150 is sufficient to get you to twice the Drath's MM, whereas you'd need a minimum of 200 ships to have triple their MM.

However, if you're able to pop their ships at least as fast as they're building them, then I wouldn't worry about it too much-just destroy their military might and you won't need too much more.  You'll probably need to reduce them to below 150 ships, though-provided you don't build any additional ships to raise your own MM.

But it's possible they'll get sick of it before then.

1. So does this mean that the starbase assist modules provide a flat bonus, not a % bonus?

2. In either case, is it a common tactic to pop up Mil starbases in enemy territory to aid in the attack?

3. If I park a fleet on the same square as a starbase, will the fleet interdict attacks (or will the starbase get hit).

Thanks again,

Jec

If I remember correctly, the extra (not specific to a weapon or defense tech) military assist modules, which come from the starbase mobilization/projection/etc tree, are placed after the starbase fortification trees-which means you must research the attack/defense modules for the starbases before you can research the assist modules.

1) Flat, yes.

2) Common enough, and valid, yes.

3) In my experience, the fleet will be attacked first, but every so often someone complains that the SB was attacked first.  I don't tend to arm my SBs, though, which may make the difference when the ships placed above it to protect it are only lightly armed.