I believe this is the same cutaway model that I saw on YouTube. Someone posted these photos recently on ET Facebook page. You cannot see the red paint on the boiler room walls from this angle, although you can see it on the bulkheads where the boilers are. Looking at it now, the inside red appears to be well below the outside red paint.The short answer, Stewart is NO!
In fact, there was no need for a "waterline" in the boiler rooms. In fact, the tops of the boilers were about 22 feet above the keel and the outside water level at lightship draft was 24 feet. There was always at good head of salt water pressure to prime the sea water pumping systems using gravity. The most important use of sea water was in the ship's fire-fighting and ballast systems.
I think that if there was a painted line inside the hull it was as Bob said, a dado for decorative purposes only, or it marked a particular safety limit or a maximum level for something else. Do you have a picture of it|?