SH5 with TWoS mod installed is a stable and very enjoyable game to play. Whether is better or worse than modded SH3 is ultimately personal preference (each game has its stronger anw weaker points), but it certainly is worth giving a try.
As for the theatre of operations, playing for the "bad guys" has (for me) better difficulty progression curve - in a game, you want to have easiest part in the beginning, then as you gain experience with the game and learn new tricks, the game should ideally ramp up the challenge to keep you interested. If one wants to keep his game historically accurate (and mods tend to), this fits Atlantic theatre situation very well, with game becoming progressively more and more difficult until even returning alive to port is an achievement. In the Pacific, it's the other way around - the beginning is hardest with faulty torpedoes, obsolete S-class boats and Japanese air and naval superiority, and late part of the game when Japanese naval power has eroded over time is actually easier.
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