Ghastly waterproof sailor has on (7)
I believe the answer is:
macabre
'ghastly' is the definition.
(I know that ghastly can be written as macabre)
'waterproof sailor has on' is the wordplay.
'waterproof' becomes 'mac' (mac is a kind of waterproof).
'sailor' becomes 'ab' (abbreviation for able seaman).
'has' means one lot of letters go next to another.
'on' becomes 're' (regarding).
'mac'+'ab'+'re'='MACABRE'
(Other definitions for macabre that I've seen before include "Gruesome, suggesting death" , "Gruesome, morbid" , "'Grisly, gruesome (7)'" , "Ghastly, gruesome" , "Gruesome and weird" .)