I think the latter idea has more merit, but any "fix" to make blockades doable must also include a complete rework of the Naval AI.
Nope. Any fix must include a whole host of other mechanics.
The biggest problem with a "Close blockade" mechanic just being blindly added to HOI3 is that it would be to easy to park SAGs and CTFs off the coast of continental Europe or Japan and sing, "Trolololololol..." in the finest tradition of Eduard Khil while the Axis powers make frowny faces.
To make it be balanced, you have to include all the things that made such blockades dangerous in certain situations. We're talking about mines, e-boats, submarines lying in ambush, shore guns (with range equal or longer than BBs), spotters on land that can count ships and direct anti-ship efforts, spotter aircraft that can give defenders visibility just over the horizon (without RADAR!), Italian frogmen that can just manually guide torpedoes into capital ships and take them out (hey, now there's a use for covert ops points!), mine laying ships, mine laying aircraft, minesweepers, and about 2087 things I'm leaving out because I'm not an expert on WWII.
Think about it for a second: when was the last time you lost a ship to a mine in HOI3? Go look at US ship losses in WWII and look at the destroyers and submarine losses for a moment. While not the biggest killer of ships in WWII, mines and shore guns took their toll
even without close blockades being in force for extended periods of time against fortified targets like Truk. Now imagine planting SAGs 3 kilometers from Cherbourg in 1941 for days on end to enforce a close blockade. It'd be like getting eaten alive by mosquitoes without extensive preparation.
It works the other way, though. The Allies mined areas to enforce blockades. Again, a lack of granularity in the mechanics.
Note that Allied ships were attacked by torpedo boats during Overlord, and the Allies lost a destroyer. But of interest to those counting is that the Allies lost no ships to mines on D-Day... because they knew where all the mines were thanks to ULTRA intercepts, not because the mines weren't a threat.
