Aside from crew habitability improvements, better radiOS, and greater range with improved battery technology and better, more efficient diesels engines, the biggest advances between the two wars were the snorkel, radar, and sonar.
The snorkel allowed submarines to remain submerged while running their diesel engines and recharging their batteries. This was a huge advantage in remaining undetected, although towards the end of the war, advancements in surface ship search radars cut into that advantage.
Radar fitted on most, possibly all, U.S. submarines greatly improved target acquisition; Dutch and English submarines were also universally fitted with radar by war's end. Japanese and German submarines also used radar, but were not able to deploy enough units to make a difference.
Sonar improved greatly during the war, at least in terms of hydrophone sensitivity (this unit converts pressure changes due to sound to electrical signals), if not actual employment. Much of the advanced R&D for sonar started during the 1950's, and continues to this day.
Crew habitability improvements included refrigeration and air conditioning on newer U.S. boats, also better distilling plants meant more fresh water, enough for the occasional shower and clothes wash. Still, tough to get rid of that unique mix of body odor and diesel, even on today's modern nuclear powered boats.
One might be tempted to think that torpedoes got better, but not really. U.S. torpedoes malfunctioned regularly, though the new battery-powered engines reduced detectability and, thus, limited the target's ability to evade. European and Japanese torpedoes were Excellent, and deadly.
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