Fragile Allegiance (sole 4X game I played) had same hit damage mechanic as well but they had spiced things a bit with three components , Deflector had chance to reflect damage, Warp had chance to render ship invulnerable but not attacking as well and last one was scrambling electronics of enemy ships.

Maybe spicing things with such options at least gives small fleets chance to rely on technology.

I would suggest taking a look at real naval battles and see what tactics, technology, etc. have been used for dealing with this sort of issue. Things like fire ships, torpedoes, stealth, battle location have been used for a weaker force the chance to win or inflict greater damage than they may have achieved otherwise.

Also if you are reading about real naval history, then you should read up on Taffy 3's miracle during the Battle off Samar. Destroyers and Destroyer Escorts backed with Escort Carriers faced off against nearly twice their number of battleships, cruisers, and destroyers, but still managed to repel the attack when pretty much every text book action would have given a Japanese victory with relatively light losses. Ideally there would be some kind of mechanic in place to allow such an event to happen on a few very rare occasions, and ideally be coupled with 'fuzzy-numbers intel' views.

Yeah, I'm thinking about it too (that's how it worked before I decided to go fancy and simulate every single ship). Definitely the old "stacks fire at each other and kill X enemy ships" worked quite fine.

That's not quite what I meant. The damage inflicted is determined by the victory outcome, the weapons and ships numbers tallied are more for skewing the percentages to alter the outcome, but the actual losses are calculated by the victory outcome. For example, a Minor Victory could result in something like a random spread of 10-25% casualties for the victor, and 10-35% casualties for the loser, Total Victory could be something like 0-10% casualties for the victor, 75-100% for the casualties, etc. (and a casualty could be either a total loss of the ship, or just heavily damaged, etc) The nice part about that kind of a system is that it should provide more routs and retreats instead of the somewhat robotic and artificial total destruction scenarios than some of the other 4x games out there. It's an attempt to simulate maneuver, ranges, tactics, morale, etc, without actually having to delve into huge detail about those things.