I think Im only legally obligated to lend assistance only if it is a dire
situation or someone is hurt. Maybe someone could clear this up.

You're obligated to help people, not boats. If he was at risk of loss of
life you'd be obligated to help him. But not to drag his unprepared boat
anywhere. Had anything gone wrong during that towing it's likely you'd get
stuck financially. Your insurance policy would probably not cover it *at
all*.