Faster has a good memory. The T-2 tanker (that's the one that carried all the oil to Britain during the recent unpleasantness) were turbo-electric and the submarines of the era were diesel-electric. Old ideas, with new technology, have a way of coming around again, ie...fuel injection in the 1950s. While the size of the diesel engine may be reduced, the size of the generator, or alternator, will be substantially larger. I don't think we're talking about just a charging system on steroids here. If we cannot get serious power out of the diesel-gen. set then i believe we're wasting our time. Low power means contemplating matters such as batteries as ballast. High power has certain safety concerns with it as anyone who's seen a large gen-set overspeed and fly apart. The common thread contains, "lucky to be alive". AC offers a 3-5% improvement in efficiency over DC and would probably be "safer" than DC. One advantage, of course, is that one could seperate the power unit (diesel-generator) from the drive unit (motor) and that opens up a lot of possibilities.
Diesel engines are very reliable and very safe. The addition of a large output generator reduces the "safeness" to the extent that we are dealing with very large voltages in a marine environment. That is acceptable on a merchant ship, and maybe in a Toyota, but it should give pause in the somewhat porous structure of a small boat. Remember, your tax dollars are being spent to train rescue workers on what not to cut, with their jaws of life, on those Toyotas. The conduit those cables run in are painted int. orange for a reason!