First....hello and welcome to the forum!
to answer your first question...The reason that your torpedoes are not exploding is because your angle of impact is too much. you want to get as close to 90 degrees as possible.
The torpedo has impact sensors on the tip, and they have to contact the side of the ships hull to trigger the torpex explosive.
Your second question about losing contact is simple. Just go to your navagation screen and you should see the ship that you lose visual contact with. It will be a square symbol on your map.
