Attach to a Warship location you control. Attached location is immune to non-plot card effects.
Add 3 to your total STR during any [Military] challenge in which you control at least 1 attacking character.

I've always though of this attachment as only effective when I am attackling but does the naval option changes that? - i.e.:

Someone attacks me (Military), and I declare defenders

I can I then kneel a 1 strength character with a military/naval icon as a attacker

Does this mean I then get +3 added to my total strength (on defense) for rach Outfitted for War that I have in play?

Attach to a Warship location you control. Attached location is immune to non-plot card effects.

Add 3 to your total STR during any [Military] challenge in which you control at least 1 attacking character.

I've always though of this attachment as only effective when I am attackling but does the naval option changes that? - i.e.:

Someone attacks me (Military), and I declare defenders

I can I then kneel a 1 strength character with a military/naval icon as a attacker

Does this mean I then get +3 added to my total strength (on defense) for rach Outfitted for War that I have in play?

Going by precedents from the titles, I believe the correct interpretation would be as you state;

"Your side/your total strength" is only relevant when you are the attacking (or defending) player.

The +3 str from Outfitted for War is only in effect if you have an attacking character, regardless of which side he's participating on.

So, as you say, if you jump a naval character in to attack against you, you'd gain the benefit of outfitted for war on the defense..

Yep. It's pretty cut and dry. By declaring a [Naval] attacker you now have a participating [Naval] attacker. Thus you would get the +3 strength added to your total strength (which must refer to your defending strength as the attacking strength is your attacker's strength total).