My copy did not require any activation of any sort.
On the question of how hard is it, the answer is, as hard as you want to make it. Like SH3, there are a number of 'assists' you can use, which ease you into the sim, effectively getting the crew to do all the hard work whilst you concentrate on the tactical decision making, such as how you will complete the mission, what route you'll take, what depth you'll go to, how stealthy (or not) you choose to be - i.e. like a real boat skipper. you can even do all that with voice commands if you like, not touching the keyboard very much, as the sim has that capability.
Start turning the automated crew members off and it can get pretty tough though. There is a fair bit to learn, but it essentially is no more complex than SH3 in most respects, in that you have to learn weapon capabilities, systems on the sub, speeds to go that will keep you quiet, watching your visibility etc, just as you do in SH3/4. In some respects it is easier than SH3 though, as there is no crew management for example, so you don't have to worry about micro-managing who is in what compartment. But where it does differ from SH3 quite considerably, is that there are definite goals to achieve in the missions, although with its (very capable) mission designer utility, there is nothing to stop you from making missions to suit whatever you want to do, and there is enough random capability in the mission designer to allow you to enjoy your own creations.
What people find trickiest of all with Dangerous Waters, is interpreting the data you pick up from the sensors; notably, Target Motion Analysis, although you can have the 'autocrew' do this for you if you like. This is quite an art form if you do it manually, and combining good positioning and data acquisition with intelligent interpretation of what data you have is almost a simulation in itself in addition to all the other aspects of the sim. so it can be a real 'thinking mans/woman's sim' if you choose to make it so.
There's definitely fun to be had in learning it all though, and because Dangerous Waters simulates several different platforms, from surface ships, to subs and airborne ASW assets in some detail, it would probably help to think of it in SH3 terms as being like a combination of SH3, Destroyer Command, and a flight simulator where you could fly a Shorts Sunderland or a Focke-Wulf FW-200 Condor. This is probably what makes it seem complex more than anything else, but of course, there is nothing stopping you from ignoring the surface and airborne parts of the simulation and simply doing purely submarine missions if you so desire.
Incidentally, the printed manual is very nice, I personally bought it, but be aware that it already comes in PDF form with the sim, so you don't actually have to buy it, although it is nice to have it.
If you liked the cat and mouse aspects of The Hunt for Red October, you'll like Dangerous Waters, and find it easy enough to get into, but still able to offer many challenges. You won't get bored of it, that's for sure.
Chock