Ahoy Andrea,
On the early W-32's the hull top ended about at that height in many areas. The height varied. The deck mould sits on a shear clamp just above the hull edge. The gap that was left between the deck mould and the hull mould, under the cap rail, was originally filled with a polyester "Bondo". Cracking of this bondo was/is inevitable and needs to be refilled. This is not a big job. I can not say positively that that is what the crack is but I am 90%+ sure.
To make the best repair it is recommended to dig out and clean as much of the gap as possible. The recommended new fill would be determined by the person doing the job. Over the years it has been refilled with polyester, epoxy, polysulfide, polyurethane, and probably a dozen other substances. Let some other people make some suggestions to you. (Are you listening Norm?)
I will be in the bay area the last week of June and could take a look at it if that is of any assistance.
Good luck and keep us informed. Dave