You decided to make "ShipHealth" a game attribute (purple). Under Settings > Attributes, your ShipHealth is set to 0. Unless you give it an initial value greater than 0, your ship gets Fist of the North Star'd and is already dead before you even compile. You are setting a blue attribute "Ship Health" to 5 in a when created event for the Player Ship. Purple and Blue attributes are different. Furthermore your "Hit" custom event is decrementing a local attribute (blue). You are mixing two different things.
Solution: remove "Ship Attribute" from Settings > Attribute, then in your "Update" event, replace the purple block with the blue one.
Other notes:
-Use only one "Updating" event in your code per behavior, that's my recommendation. You can have stuff for movement, camera limiting and kill on 0 health all in the same event. Use comment blocks to identify each part.
-There is no code in your bullet to deal damage to the player ship. According to your collision groups, the bullet canot even colide the player ship. That means the enemy ship cannot damage the player at all.
Solution:
1) In your bullet code, replace your collision event with the "something else" collision event (the first one) and adjust your code accordingly. That way your custom event "Hit" will be called for whatever it hits.
2) You'll also need to make your bullet collide with the player ship (Settings > Group).
3) You have to create the bullets further apart from the player ship with an offset. An offset is a position adjustment, something like "X position of self + X offset, Y position of self + Y offset". You must adjust the offsets so that your bullet does not colide with the player ship when created, otherwise it will hit itself. Consult the video I posted earlier about positions. In short, positive X is to the right, negative left; positive Y is down, negative is up.
-You could have made the health portion of your code a behavior, and attach that to both your enemy ship and player ship. That would include health management through non-hidden attributes (ship health as a number that is not hidden instead of setting it on When Created), the "Hit" custom event and death on 0 health. Making behaviors for reusable code is my recommendation.