Past simple, past progressive(правильно употребить)
We (be) in a ship and we (travel) to Honolulu.
On the ship there (be) a disco. We (sit) on good seats and we (drink) exotic cocktails. Lots of people (dance) and the music (play).

We were in a ship and we were traveling to Honolulu.On the ship there was a disco. We sat on good seats and we were drinking exotic cocktails. Lots of people were dancing and the music played.