So I was thinking, instead of mandating naval battles only go one round, why not just give both parties a retreat option (TBD). In many cases this would self restrict naval battles to one round.
Yes, but when you retreat, the other is not allowed to chase you. In real naval battles it is common to chase each other, but in a game that kind of behavior violates the turn order.
I think time is an issue. A game turn is considered to be like 6 months, while a real life naval battle usually took less than a day. On top of that, our ships seems to be stuck in their little seazone. In the real world a ship could easily sail around the world in 6 months, as is the length of a game turn. Now imagine that in a game, a ship with unlimited movement.
I think in order to make a game that behave as close to the real world as possible, we must analyze every naval battles from 1904 to 1945, and then we will see that WiF is the game that come close, and that Axis and Allies has a long way to go.