No, I don't think songs should be frozen in aspic. I think our difference is on the meaning of the word "credibility". Using modern slang can make the song more immediate to the current audience, but using the original words doesn't make the song less credible: less understandable, perhaps, but that's something different.

On the other hand, dropping a modern reference into what is an earler event can jar. If you imagine sailing over the Dogger Bank as something being done today, then "sheep shagger" is fine. If you have in mind a period piece, then it doesn't fit.