I don't think enemy a/c should be identifiable over 3k away, and a/c model should only be specified from less than 1k. Further, Between 3k-6k....small green/red circle or sign should appear above aircraft. Bright red lettering is too obvious, and makes it harder to sneak up on someone (how most WW2 pilots got kills), it also will force pilots to be more aware of their surroundings, and actually scan.
I also think it'd be interesting to display damage done to enemy a/c in text bar... Due to limited graphics, you can't really tell what damage you're doing to an a/c like you could in real life. Having a small message in text bar popping up that says
"you destroyed enemy right aileron"
...would be a pretty cool feature. I've always wanted to know what, if any damage I'm doing to a bomber when I'm pumping 200 rds into it.