Naval Imagi-Nations or Alternate History

Now this is a dilemma and no mistake. Does one go with a historical navy, a navy with some ships that may have been but for one reason or another never were or does one throw caution to the wind and make up navies of whatever warships history (or the player's imagination) can furnish?
Whilst reading Fletcher Pratt's Wargame (the John Curry version) I was struck by the fact that many of the famous 'ballroom' games of yesteryear used fleets made up of ships from varying nationalities. The closest I have seen of this approach these days is with Axis and Allies: War at Sea. Most naval gamers of my experience would probably cringe at using a fleet made up of, for example, American battleships, German cruisers and British destroyers. We stick religiously to our chosen navies - warts and all (and coming from a Turkish naval perspective the warts are truly biblical in their proportions!), and are loathe to amalgamate fleets as this would be an anathema to our collective loyalties.
The big problem with ships and their attendant models is that nationalities invariably produce ships that have certain similar characteristics - for example, a County class cruiser could not easily be mistaken for anything else; nor could the Bismarck nor indeed any other of the ships that most WW2 naval gamers know so well. With smaller navies this is not quite so obvious a problem as usually they acquired warships from a variety of sources. Taking the Turks again as an example, in 1914 they owned British and German built battleships, an American built cruiser, French and German destroyers and gunboats and nearly acquired an Italian built cruiser. Using ships from many sources then is, in this particular case, historically accurate.
The big advantage of using an imagi-nation in this respect is that it matters not in the slightest what the ships are or where they were built - the assumption being that the various arms merchants have very few scruples as to whom they sell their wares to. The downside is that however much you attempt to disguise a well known warship it will usually still look like its original version. The Sultan Fineghar 1st (the Turkish Fleet Flagship during the SE Asia WW1 naval campaign) began life as an Airfix HMS Hood and during her short service life still looked like HMS Hood despite the addition of a Turkish flag and an extra 15" turret amidships.
The option I am considering is from the three mentioned is to use the historical models as they are and to add in fictional sister ships where applicable and then to use an actual ship as a template in respect of specifications and design etc for any scratch builds or conversions. At its simplest level it could be merely adding an additional ship to an existing class - at the other end of the spectrum it could be a complete scratch build or an extensive conversion. In many ways this was how the SE Asia WW1 fleets started out although this was badly compromised by the continual beatings the Central Powers suffered and they eventually using ships drafted into action as soon as they could be readied.
In real terms then it means that the ships I will use can easily be furnished from the base Sink the Bismarck set. The purely historical types will remain as they are and any subsequent conversions or scratch builds will follow the pattern of their actual historical counterpart in respect of specifications. More importantly though, they will maintain the essential and all important 'look' unique to both the Royal Navy and the Kriegsmarine in respect of outline and fixtures and fittings. Essentially a scratch built British or German cruiser will then look like a British or German cruiser by virtue of using many of the fixtures and fittings that will be spare in the aforementioned Sink the Bismarck set.
I have yet to consider rules in any great detail although I own numerous commercially available sets. I will be looking at something home grown and old school in its approach though. This however, will be something for the new year methinks as I have quite enough to contend with at the present!