Nunya;
it depends on how "real" you want the game. I'm running 1.4 with TMO and RSRD. This definitely "fixes" the too-many-aircraft aspect from the stock game. Your orders are much more practical and IMHO it's a nice balance. The number of unrelated contact reports is cut way back to the point that you'll get reports that are only within a certain radius of your position (at least that's my perception). Then it's up to you to decide whether it's worth the course change/fuel to try for an intercept.
As to the unescorted ships being sitting ducks, that's not necessarily a bad thing, LOL

The variety is not bad in the TMO/RSRD combination. I've moved to try and intercept a radar contact only to find it was an enemy TF moving at a high rate of knots and no way to catch them. Most contacts are one or two ship groups and only in the known seaways. Give TMO and RSRD a shot I think you'll appreciate it.