Medals awards have always had "problems", in all SH games. There's not much you can do except pretend that's the way it happened.
I can't help much with upgrades since I never use them. I think you might be offered a better boat at some point, but I'm not sure. Transfers are available for the asking. I've never done that either, so I don't know exactly where to click, but I think it's the telephone on the desk.
I always run concurrent careers, one from each available flotilla, so I always have one of each type of boat running at the same time. You could just start a career with a Type VII or Type IX.
