Ships gain hit points based on taking damage but surviving battles. An "experienced" medium hull ship can sometimes get into the 100+ hit point range. You can accelerate this process by using upgrade to repair ships. You need to create two differently named but otherwise identical ships. Like Fighter A and Fighter B. Then when a ship of one type takes some damage you can take it out of the fleet leaving it in the same sector so the fleet will protect the ship and then upgrade from Fighter A to Fighter B which will restore the full hit points but cost very little because the upgrade is so minor.

You can also gain hit points by surveying anomalies as well as gain "experience" but I've never been able to correlate that kind of "experience" to anything obvious.

Then next turn the ship can rejoin the fleet all repaired and ready to fight assuming you're close enough to your influence area so that the upgrade takes a single turn. Also works great after just taking a new planet. Since you're next to your own planet the upgrade will happen quickly and you can repair all the damage that the fleet took while taking the planet.

Minor races are races that do not colonize planets and are immune from influence so they will not flip. They are useful soruces of trade for cash, They're like pets. It's nice to keep them around for a ready source of cash when needed but eventually you'll want to take them out. They do have the habit of grabbing up any mining ressources that they come across. I always select 8 because that just gives me 8 additional good planets in the galaxy that I would not otherwise have but they aren't all that important one way or another. Think of it as merely adding flavor to the game.