Based on user feedback I have made the following changes to the game:

1. Replaced the fixed camera with a smooth-follow camera using Cinemachine.
2. Locked  mouse movement to the game screen and hide mouse cursor during game play.
3. Improved targeting. Weapons will now lock-on when close enough.
4. Did some work on balancing ship weapons, shields, hull strength, etc. Torpedoes are much faster now and more accurate.
5. Player weapons will no longer damage the ally transport ship.
6. Tweaked UI: made enemy health bar larger and repositioned it slightly,  hide FPS counter by default (F2 will toggle it).
7. Increased cool down interval for player torpedoes. 
8. Fixed bug where ship system UI glitched after displaying pause/help screen.
9. Slowed down rate of fire for enemy destroyer torpedoes.