What does "up she rises" mean in the sea shanty "Drunken Sailor"?

According to dauntlessprivateers.org, there are five types of shanties:

Capstan shanties: Sung while raising anchor. Also known as "stamp and go chanties" because sailors would stomp the deck while turning the capstan.

Halyard shanties (Long Drag Shanty): Sung to the raising and lowering of sails. The crew would rest during the verse and haul during the chorus.

Short drag shanties: Very difficult tasks meant crews could pull less. Short drag shanties were used for such tasks - such as trimming the sails or raising the masthead.

Windlass and pumping shanties: the windlass is also used to raise the anchor. Sailors would pump handles up and down, making the barrel of the windlass rotate to bring the anchor chain up. There were several different types of pumps, which accounts for the variation in the timing of pumping shanties.

Ceremonial shanties and forecastle songs: songs were those sung by sailors on their time off (of which they didn't have a great deal). Ceremonial shanties were for times of celebration, such as when the sailor paid off his debt to the ship or when they crossed the equator.

This website has this to say about Drunken Sailor:

The capstan shanty was a moderate tune sung to raising the anchor. In order to raise the anchor bars were inserted into the capstan and sailors would walk around it, turning the capstan to raise the anchor. Sailors would stamp on the deck on the words "Way Hay and Up She Rises."

I think the stomping rhythm and steady beat of the song makes it is clearly a Capstan Shanty — it doesn't seem to slow down or "rest" during the verse. So, I think it's most probably referring to the anchor rising…

Who knows though, I'm sure people have sung it to the sails too. ;)

This takes place early in the morning, so she could be the rising sun. But sea shanties are work songs so it is more likely to refer to raising the very heavy main sail and the gaff (cross beam) that would require the whole crew to heave it up.

Wikipedia backs this up with a citation:

• Stamp-'n'-Go Shanties: were used only on ships with large crews. Many hands would take hold of a line with their backs to the fall (where the line reaches the deck from aloft) and march away along the deck singing and stamping out the rhythm. Alternatively, with a larger number of men, they would create a loop—marching along with the line, letting go at the 'end' of the loop and marching back to the 'top' of the loop to take hold again for another trip. These songs tend to have longer choruses similar to capstan shanties. Examples: "Drunken Sailor", "Roll the Old Chariot". Stan Hugill, in his Shanties from the Seven Seas writes: "["Drunken Sailor"] is a typical example of the stamp-'n'-go song or walkaway or runaway shanty, and was the only type of work-song allowed in the King's Navee (sic). It was popular in ships with big crews when at halyards; the crowd would seize the fall and stamp the sail up. Sometimes when hauling a heavy boat up the falls would be 'married' and both hauled on at the same time as the hands stamped away singing this rousing tune."

As to the earl-aye pronunciation, Colin Fine commented this is sometimes used by traditional folk-singers today. I expect this is done to give it rhythm.