It most certainly does. In fact, the appearance of iron built ships at first made breaking damn near impossible! But more on that in a moment. My knowledge extends mostly into the realm of breaking and building of wooden warships, of the Royal Navy in particular, so I'll focus mostly on that.

In the age of sail, any wooden waships represented a significant investment. Years of fast paced building led to depletion of the necessary oak trees in Britain, thus keeping a warship in service as long as it remained an effective platform was crucial. However, all warships would eventually reach the end of their lives. Timbers would lose watertight integriy due to flexing and rot, meaning seaworthiness, stability, speed and handling would suffer. In the days before bottoms were copper plated, Teredo Navalis (shipworm) would devastate the hulls of warships sent to tropical stations, meaning they would often have far shorter active service lives than their sister ships deployed to cooler northern seas. Eventually a shipwright would have to declare the ship unfit for further active duty, and the future of the vessel would have several different possible outcomes. A ship unfit to join the battle line might go into a reserve role ("laid up in ordinary"), or would be used as a guardship, essentially a floating mobile gun battery to deter any enemy who felt like raiding the port, but often would be hulked. This meant the ship was paid off (back then, a ships crew was scrounged together when it came into service and where paid in full for the time they had served on the ship when it was taken out. Unscrupulous captains used this as a way to avoid paying their crews by keeping the ship in constant service instead of taking it off the line for repairs or winter periods like they should have. This saved cash, but the crew was often understandedly peeved by this). It would then be stripped of all guns, armaments and fittings, as well as sails and rigging, which would all go into storage at the respective dockyard for refurbishment and redistribution to the fleet.

This hulk would not be abandoned, in fact they could often have longer lives hulked in port than on active duty. With dockyard space often at a premium some would become storage hulks for holding gunpowder (a handy way of keeping possible powder explosions downriver from things you don't want blown up) or victuals. Barrack and receiving ships would accomodate seamen or cadets in training. Great Britain also found hulks a great way of storing prisoners of war and convicts, with the added bonus that these floating prisons of varying seaworthiness could then be towed away to Australia when transportation of convicts came into fashion.

If it was not needed for these glamorous roles, the ship would be disposed of. I some cases this meant dragging off to deep water and scuttled. This fate was often reserved for ships too rotten and old to be broken up, as they might not even make the journey to the breakers yard. Other ships were simply burned, such as the case of HMS Black Joke, a brig of the West Africa Squadron who caught several slave ships and was ordered burnt when her timbers were inspected and found to be far too rotten. Alternatively the ship could be auctioned off to a breakers yard, who would tow it to a stretch of river bank to be beached at high tide and broken up by salvage teams. What was salvaged varied. Sometimes when the price of timber was high due to shortage or war, the ships structual wood could be sold back to the Navy, or to house builders or furnitre makers as teak and oak were highly prized for such purposes, with less valuable or more rotten and damaged timbers discarded. In other times, or places where labour was too expensive to make breaking up worthwhile, the ship was simply burnt by the breakers. After this they would sift through the ashes for the metal fastenings and sheathing of the vessel, which could be sold back to the navy as well.

Interestingly, the advent of iron and later steel made breaking more difficult. The SS Great Eastern was a prime example: Sold for scrapping in 1888, the company who purchsed her lost a fortune doing so, taking 18 months to reduce her. The problem was that the technolgy for breaking apart steel and iron built ships did not yet exist. The Great Eastern scrapping did involve the use of a large wrecking ball, but was mostly back breaking work with hammers and manpower. Eventually modern tools like oxy-acetylene cutting torches and powered hand tools made life far more profitable and easy for breakers yards, which would shift to areas with existing heavy industry and mtalworks so the scrap steel could be easily sold on.