Remember that there are 2 cfgs. One is only for your sub (sensors.cfg), the other for AI ships (Sim.cfg).
As for height, that's not observer height, I believe that is the minimum height the sensor will see. So if it was 1m, a scope would be invisible below 1m (I think). In reality, while low might help for something right on the horizon, the horizon distance is a function of observer height.
My ultimate solution for visuals is to have many different visual sensors to pick from. So merchants can has whatever they are equipped with in their sns file. Any number of merchants can be BP-cloned to a new name, and given better or worse sensors, too, to mix things up.
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