Portholes are round holes with doors in the side of a ship, big enough for cannons to be run out and fired. They were invented in England by a French shipbuilder named James Baker, during the realm of Henry VI (in the late fifteenth century).
If you just had holes in the side of the ship, too much water would get in during heavy weather; it could fill up the ship with water, and also rust the iron cannons. The word "port" is from French "porte" meaning door.
Portholes later came to mean any windows -- round by custom -- in the side of a ship.
I have to mention here the great scene in the movie Diamonds are a Girl's Best Friend, where Marilyn Monroe walks into her cabin on the cruise ship, pauses, elegantly points, and coos, "Oh look!!! Round windows!" It is so perfect, because nearly anyone who wasn't a hick and kind of a moron would know that ships have round windows and that they are called portholes -- not really something to remark on! It is a good phrase to say when you want to point out something really obvious.