The route to Axis victory against the major naval powers should be control of the air.
Not necessarily. The German navy severely underperfomed in WW2, especially in 1939-1942.
There are multiple things HOI4 does not simulate at all:
1. German naval torpedoes having built-in design flaws: up to 70% failures to detonate after hitting the enemy. The problem was only solved in 1942 due to one crazy u-boat captain, that, against all instructions, disassembled a torpedo while on a raiding duty in the middle of the Atlantic.
Imagine if that would be solved by 1939?
2. Kaiserlichmarine worship. The head of the navy, Raeder, was a staunch worshipper of the Kaiserlichmarine, and saw "preserving the spirit of Admiral Tirpitz and his family" as more important than actual combat effectiveness.
For that reason, he had a "ideological" reason to favor building battleships to do a "Jutland revenge" on the British.
That also led to putting down anyone who criticized the German WW1 navy and even their relatives. For example Raeder's ex-best friend's son, Wegener, was secretly forbidden to serve in a non-technical specialist capacity, for his father's criticism of Tirpitz's naval strategy.
3. Raeder "family company" approach that extended into private life of the navy.
It went to the point of Raeder and Hitler mutually ignoring each other for a few months in the summer of 1939 due to literally "Raeder not liking Hitler's naval aide's marriage partner choice to the point of kicking him out of the navy. and pissing off Hitler". Good job man, the war was two months away.
4. The navy had problems using naval aviation as there was a conflict of who gets control over it: Kriegsmarine or Luftwaffe.
With the Navy being weaker in the conflict, while the Luftwaffe having naval domination as a second-rate goal after ground troop support.
5. All Kriegsmarine programs were designed with the intent of war after 1942. When war began in 1939, it was caught off guard and had nothing to do but to do improv.
You probably saw the German navy perform at 25% of their actual potential in WW2.
In RL, Germany lacked the resources to build an airforce capable of imposing air superiority over the English Channel. The strategic advantage of the UK was only partially its surface fleet. Much more important was its immense merchant navy. Over 30% of all of the world's shipping tonnage was British in 1939--you couldn't build enough submarines to sink enough ships to starve Britain of its industrial power.
Germany focused on subs as an improv starting in September 1939, when they realized there was no other way they can put up a fight.
And you couldn't win the air war without starving out the factories which by the early 1940s were building Hurricanes and Spitfires faster than Germany could build 109s.
The problem was not that.
The German Luftwaffe was built for the "European theatre of land warfare" and completely unsuited for long-range operations. The Bf-109s simply did not have the range to effectively fight in the channel in 1939-1940. We can check up on France 1940 to see how well the Hurricanes & Spitfires did there.
If Germans would have traded their Bf-109s for A6M Zeros, you would have a very different scenario in the Battle of Britain. Though maybe a different one in France.
I don't think Sea Lion should be impossible in-game by any means, but it should be a much more significant achievement, requiring advanced mastery of strategic (rather than tactical) warfare. Sink hundreds of convoys. Win a slow war of attrition in the air.
Sealion would have been a lot easier than the Normandy landings for sure.
After all, you can check how Germans managed to sneak Scharnhorst & Gneisenau BCs out of Brest right down the channel in 1942 (Operation Cerberus) to see who really controlled it, even after the Battle of Britain ended and Barbarossa began.
The main problems are connected to weather and have a hard time being simulated in HOI4: the channel has seasonal storms and generally a lot depends on weather (a curse of the Spanish Great Armada).
D-day became possible due to Allied meteorologists finding a "window" of a few hours of optimal weather for the landings, and even then we all know what happened to the "temporary ports" days after the landing succeeded (spoiler: they were washed away).
Germans simply did not have the time to launch it, nor did they want to risk failing so badly when there are a lot of other places where they can beat the Brits easier (Greece, Cyrenaica)