Why - radar, of course...
but seriously, I cannot remember for certain, whether the sensors.cfg or the sim.cfg in the Data / Cfg folder does the most... but there is a "balance" there that can be difficult to achieve. You might be able to make night surface attacks possible, but will the ships shoot at each other before 2400 yards? Will your crew shoot at airplanes before the bomb hits? That sort of thing. If you increase the AI Visual, it affects enemy as well as friendly forces... that of course, can also affect your torpedo targeting distance as well...