Stacking penalty should still be there. Note that it affects positioning and isn't a flat -90% combat modifier or sth. It's a game, you need to have a stick that you need to use against gamey players. I agree about convoy raiding and the AI. And I certainly agree about detection. If combat will still start automatically virtually every time the units end up in the same sea zone (excluding subs), then neither surface raiders will ever be viable nor smaller fleets will have a chance to change their location. It should be noted that ping-ponging is a big problem - you can annihilate fleets by constantly engaging them and it's super-easy to do that, which suxx.
Honestly, I wouldn't mind if they changed the "passive", "defensive", "aggressive" commands to tell your fleets whether to engage the enemy.
Like your fleets have 2 modes, aggressive or defensive, and when two aggressive fleets meet, you get a big fight. When defensive and defensive meet, they never fight. And when aggressive meets defensive... something happens
-if defensive fleet is faster they run away without any engagement
-if aggressive fleet is faster they fight
Could do with some refinement but you get the general idea... Cruiser warfare will kill a megastack by convoy raiding and ducking out of the way when the big boys come in.
You would need to decide how to handle CAGs and land based aircraft, and probably you want cruisers to fight cruisers to stop things getting too silly.
Also, submarines would be slow, but hard to spot, so they wouldn't "meet" other fleets too often
I agree that naval combat would be far more realistic if it was deadlier than it is, BUT, there si a problem with that: the AI. The AI happily sails the seas without any regard to proximity to the enemy coast, possible enemy naval forces or anything else. On the contrary the player knows the happy sailing enemy navy and acts consequently: putting all his ships in one powerful fleet and sinking the enemy fleet bit by bit. If you made naval combat deadlier this problem would become sharper. So no deadlier naval combat unitl the AI learns some prudence
Build the game to be realistic, worry about the AI afterwards as a general rule. I agree that there may be some need to reign in highly complex mechanics, but I don't think it's too hard to teach AI to do some of these things a little better
On stacking penalty, I agree that as a last resort, a small reduction in marginal gains for marginal fleet size may be needed, but historic reasons should come first, and stacking as a last resort