It might be that the hull has a lip that the deck sits over, The idea being that the vertical edge of the deck moulding sits over the lip, resting on the knuckle created by that lip in the hull and therefore is flush with the hull itself. It does, if I'm right, create a pretty tough gunwale. Without seeing it in person, and the photo is not entirely clear, I am guessing but it was not an unusual technique in 1960's/70's small boats.
Vaughan's advice on glassing the bulkhead into the hull is absolutely sound. Word of warning though, sometimes new resin won't stick to 1960's old glass fibre. Some yards are very successfully using West System epoxy resin but that is very expensive. There are some pretty mean silicon/bitumen mastics that were developed for building bridges and those are used by some yards, Martham Boats for example, their boat-builders call it 'black-****'. I've used it, can't think of the trade name, and it's amazingly good, but not as good as epoxy. If you are rebuilding the boat then maybe expense is not a major factor but if you just want to get afloat, and longevity is not an overriding factor, then maybe structural grade sealants could be worth considering.