Bought the game last weekend on Steam (BoS, BoM + La5, Fw190A-3) and coming from a different online air combat sim with a subscription business model I love the fresh high-end visuals, love the realistic feel to the fights on the Wings of Liberty server and similar. However, like the OP points out there are some issues with Situational Awareness and the provided ability (or lack thereof) to ID bogeys visually without the use of tags.
Yes the render distance is a issue, 10k is too close for much in terms of pre-merge positioning to take place. Also it seems all aircraft are reduced to grey smudge regardless of what color paint is on the airframe. The occasional glint or glare of yellow/red would go a long way towards being able to ID bogeys at extended ranges. From what I understand, the a/c render distance is not so much a local load/render issue as it is a server load issue.
Anyway, a dot representation of distant bogeys with a occasional tint or glare of recognition color would go a great distance towards improving the situation. Also, if there would be server settings available to set friendly / enemy tags on / off and also define the distance at which tags are to be shown, that would provide the community with more options to define their own preferred playstyle. One could argue that radio communication among friendly aircraft would make identification that much easier and therefore friendly tags would be visible at say 4k distance (a distance at which a military pilot should have NO problem whatsoever to visually ID any aircraft, regardless of angle). Therefore it would also be possible to ID bogeys as bandits when closing and no friendly tag appears, this would make the ID possible but would retain the difficulty in spotting and tracking bandits and thus the most important elements of the combat would be maintained at a very challenging level.
Just some thoughts and suggestions on the matter. But it's funny how the easiest aspects of real flying, the visual impressions and feel as you experience the plane and environment from the cockpit, becomes the most challenging aspects in a virtual environment. Quite frankly I feel blind as a bat when flying on the multiplayer servers without tags. There is no possibility for me at all to have a good situational awareness due to the way the aircraft are rendered, friends and enemies alike. Considering that historically most of the air combats that took place on the eastern front were below 2000 meters, according to Günther Rall as that's what he stated in his biography 'My Logbook'. The exception to that rule was recon flights, but it's a fact that the nature of the air war on the eastern front was very different from that in the west. Perhaps the short render range is a way the developers try to enforce this low-altitude environment?