You can subdivide the ranks of the sailors on the boats into subgroups. There are basic seamen, petty officers, chief petty officers, and officers. Within those groups, each crewman gets experience during the patrol, and when the seaman hits the top of his current level he gets a promotion. However, he can't get promoted into the next group this way. For that, you have to use a promotion at the office after the patrol. A Seaman 1st Class will become a Petty Officer 3rd Class this way, and pick up a rating (specialty) of your choice when it happens.
Medals are allotted to you based on tonnage sunk during the patrol, but if there is any in-game effect to awarding medals, I have yet to see it.
PS. I hope I didn't reverse the ranks there. I haven't played much lately so I'm doing this from memory.
