Marine propulsion control system and method with proximity-based velocity limiting

A propulsion control system for a marine vessel includes a propulsion system comprising at least one propulsion device configured to propel the marine vessel, a proximity sensor system configured to generate proximity measurements describing proximity of objects surrounding the marine vessel, and a control system. The control system is configured to receive the proximity measurements, generate a most important object (MIO) dataset based on the proximity measurements, wherein the MIO dataset defines a closest proximity measurement in each of a plurality of directions with respect to the marine vessel, calculate a velocity limit dataset based on the MIO dataset, wherein the velocity limit dataset defines a velocity limit in each of the plurality of directions, and control the propulsion system based on the velocity limit dataset.