Please keep in mind that difficulty does not mean realism.
Rockin Robins had an excellent post, I hope he copies here, about how playing with contacts off makes the game more difficult, but not necessarily more realistic.
It is impossible for any computer submarine game to simulate the actions of the entire crew. While command may be lonely, the submarine captain had not only well trained crews but also other electro/mechanical aids for the crew to use.
This is my number one complaint about submarine simulators like the SH series (and every other subsim out there). The player is forced into one of two unrealistic extreme positions
1. Varuna mode - where the player is given all the information with absolute precision.
2. Hermit mode - where the player is the only person on the submarine and has to do everything a crew had to do but by him/herself in the same time.
Both are equally unrealistic. Playing in Hermit mode is certainly more difficult. But is as unrealistic as Varuna mode.
So play the game at the difficulty that entertains you (its a game after all). But don't worry too much about realism as there ain't that much.