Unixman,
I dare say Donitz's U-Boat screen would not have been in the Channel; more like the North Sea and SW approaches to deter/prevent capital ships entering the Channel - the E-Boats would be a second screen for 'leakers'. Good point re Destroyers and light cruisers - I wonder if the Kriegsmarine would have committed any capital ships into the shallow/restricted waters? Perhaps Panzerschiffs on the flanks?
Maybe the biggest question mark is if there was ever a serious intent to invade. To strip the UK of her aircover and pulverise by bombing seems the preferred route, with the threat of invasion as a 'nudge'. It must be remembered that significant elements of the UK Establishment were keen on a 'deal' to preserve their status and the Empire.