Hmm weird.

Your not the only one with the sound issue.
It always happens to me in Mission 6 of high treason when I'm ordered to attack the Pirate base

No, was not either of the BattleStations games, thanks for the suggestion and subsequent memories. Decent games though if you can get either at a good price.
The game I was thinking about I want to say is early to mid 2000's and far more involved naval wise then the battlestation games, also if my memory serves me it was only ship based battles where you had a set fleet to complete the objective with no land or air reinforcements. It may have had ship based recon heli's though. Some of the battles were huge as well but do not remember any aircraft carriers which does not make sense.

Still can't think of it, don't think it was a very well known game, one of the hidden gems.
I'll have to look through all my old hard copy games as I may well have bought it at some point because as I've been thinking about it I seem to remember playing far more missions then they would put in a demo but then again back then demos took far longer then the 5 - 10 minutes to complete nowadays.
But I want to say the game came out 2001 or so as that is when I first got a computer and back then could only afford to play game demos. LOL

Also no problems here with big mouse cursor. Probably just another one of the many memory related problems this game seems to have. How much RAM/memory do you have?

Did a little digging, and found 2 games that fit your description.

Victory at Sea.
Battle Group 2

I found the naval missions in High Treason to be exactly the type that I like.
Combined land and naval where you can build a naval base to produce naval units.

As for the sound issue, I have been digging pretty deep on the net, but have not found a solution to the problem.
What I have seen are some people saying that the game freezes/crashes a while after the sound bug kicks in.
And I doubt there is any support from the devs anymore.

I cant think of any RTS game thats better than this off the top of my head.

Are you past the Cuba missions yet, as I said I had no more sound issues after that. Still think it was somehow related to activating the radar on the ships, did not go back and do any actual testing from a couple of the early naval missions though.

Also of those 2 games you listed victory at sea is not it but is the closest albeit way too newly made. The ships were way more detailed/realistic looking and I do not remember being able to pick the ships you wanted from a set amount of points. The game gave you a set fleet you had to complete the mission objectives with.
I'm pretty much giving up on finding it as I've google searched and looked at lists of PC naval games and nothing is looking just right. Looked through most of my old boxed games and not finding anything there.

Here is a big list of "naval" games as well and none of these are ringing a bell for me.
[url=http://en.wikipedia.org/wiki/Category:Naval_video_games]http://en.wikipedia.org/wiki/Category:Naval_video_games[/url]

Hopefully this upcoming FTP will be decent to play (not pay to win) and they will not mess it up as far as dumbing it down. Looks like it may be decent from these videos.
http://worldofwarships.com/en/media/

Hmm, i dont see [url=http://en.wikipedia.org/wiki/Naval_War:_Arctic_Circle]http://en.wikipedia.org/wiki/Naval_War:_Arctic_Circle[/url]
on that list.
I dont think thats the game you are looking for though.

I dont think the radar has anything to do with it.
Did a mission without activating the radar on any of my ships and still had sound problems.
Been a while since I completed the campaign, but I think there was a naval mission where none of those ships with the "active radar" was available and I still had sound issues.
Basically every naval mission I had the sound problem and noting I did helped.

I read somewhere about someone swapping the missile sounds on the ships for the missile sounds of those on the subs and it apparently worked.
It was not explained how it was done so I dont know how to do it, but if you can figure out how it cant hurt to try it.

Hmm odd as I had no sound problems after I got past the missions where you could activate radar on ships. Once there was no more option to activate radar my problems were gone.