[Graf Paper]

The Type II does indeed have its strengths that certain kaleuns prefer and there is nothing wrong with that just as those who prefer the larger, deep-water boats are equally correct in their choices as it all boils down to your particular style of command.

From personal experience with the Type II and Type VII boats in GWX 2.0 and stock SH3, I can say it does seem the Type II is more stealthy against ASW than the Type VII, although I've yet to get past 1941 and tangle with the updated ASW devices.
The Type II has a much quieter propulsion underwater. The II can sustain a speed of 2 kts without detection versus the measly 1 kt of the VII and can still navigate at 1 kt even with a pair of hunters right overhead where the VII would have to make a dead stop to avoid being heard.

That being said, I'd still have to question the survivability of any sub that runs patrols in shallow waters, but the Type II is well suited to such missions and the best choice for the tight confines of harbor raids.

So get those engine and battery upgrades, because you'll need them when you're spending eight hours just sneaking up to those ships moored at dock and then trying to avoid the swarm of DDs after those eels of yours score their hits.