Residents of the northern city, scarred by years of jihadist rule, demanded justice as Prime Minister Adel Abdel Mahdi decreed three days of national mourning following Thursday's accident.
Mosulites had resumed the annual festivities this year for the first time since Iraqi forces ousted the Islamic State group following years of brutal jihadist rule.
But the celebrations turned to tragedy when the overcrowded vessel got into trouble as it headed to a popular picnic site across the river Tigris.
Dozens killed as ferry sinks in Iraq's River Tigris
Mosul security officials blamed the accident on high water levels and overcrowding on the boat.
Hundreds of relatives of victims and residents gathered Friday at the scene of the accident, where prayers were held for the dead.
Many said the disaster could have been avoided, and chanted "corruption is killing us!"
"We want those responsible to be brought to justice," said Mohammed Adel, 27, whose father was among those who died.
He accused officials of failing to enforce safety standards.
Video footage from cameras at the picnic site, posted online, showed a severely overcrowded vessel beginning to list as water comes aboard.
As it capsizes completely, it traps dozens of people under its hull.
Authorities had warned people to be cautious after several days of heavy rains led to water being released through the Mosul dam, causing the river to rise.
Videos showed a fast-flowing, bloated river and dozens of people floating in the water or trying to swim around the partly submerged boat.
Abdel Mahdi said the justice system "must do its job and the investigation must produce results on the reasons for this shipwreck".
He and President Barham Saleh visited the site of the accident as the search continued for bodies, some of which were carried far downstream by the strong current.
While war and jihadist attacks have claimed hundreds of thousands of lives in Iraq in recent years, such accidents are relatively rare.
But corruption and the dismal state of public services in Iraq were triggers for widespread protests last year.
IS turned Mosul into its de facto capital after sweeping across much of the country's north in 2014.
The city spent three years under the group's iron-fisted rule until it was recaptured by Iraqi troops backed by a US-led coalition in 2017.
Survivors of Thursday's disaster were treated in hospitals heavily damaged by the months-long military campaign against the jihadists.