I try not to go over 256x TC, but if it's an area I don't expect many contacts, I will go higher. I feel fairly sure that high TC will have the same effect as in SH3, with more contacts missed.
When in a place that I feel might carry a high density of traffic, I tend to make regular checks on the hydrophone.
After making a sweep (at 'All Stop', of course), I normally draw a circle on my map, originating at my location and with a radius of about 20km, to allow me to see approximately which area I've checked. I then sail on and make another check as I approach the edge of that area (or just beyond it). This way I shouldn't really miss many ships that happen to pass within hydrophone range.
Of course, it makes for a slower game, with the constant diving, checking hydrophone, and surfacing again. Still, it keeps the crew awake
However, the current state of SH5 is a real nuisance, since all map drawings are lost between saves. Grrr.