Take your time and move in closer. If it's night and you STILL can't see their flag, back off until it's lighter and slowly move in at 1 knt Silent Running.
There's plenty of mods that can fix this so you can get in closer to idenify ship.
To me, the whole idea of the Sim it the Tension and Adrenaline Rush.
But that's me. Unlike some, I have all the time in the World to play a mission.
And iirc don't Save Under Water. It could cause CTD. Save just before you dive to play it safe.