I saw someone talking about how you can't hear ships in space, don't see motion debris, etc. So I decided to think a little into it and post my "excuses".
Why is my Valkyrie going at 85 meters/second? In the game, all of this stuff is refered to as "units". There is one part in FS2, however, that ruins it- in the first combat mission briefing, you're told that "the convoy is 900 clicks, or kilometers, away". But let's just ignore that.
Assume that each "unit" is, say, a thousand miles. The reason that you can see enemy ships even at that distance is because your HUD artificially enlarges them. If you aim at these ship shapes and your fire lands in the general vicinity, your weapons will "detonate" and cause damage even if you don't get a direct hit.
Maybe these units are on a curved scale, so things near you are at real size while more distant things are smaller than they appear. Or maybe it's because space-time is curved or something...
Why can I hear sound in space? Your onboard computers generate artifical sound to give you situational awareness. Duh!
Why haven't robots taken over the world yet and why are humans taking a break while the bots do all the work? Good question. Maybe society never made the changeover to robot labor because it didn't want workers to loose their jobs in the short-term. Or maybe only military functions are handled by humans to prevent robots from taking over the universe.
What are those 80s-era grayish sprites doing on my beautiful monitor? Those are called "motion debris". I can't think of any reason why there would be so much junk floating around in space with none of it hitting you, but let's assume this is another arifical HUD situational-awareness thing.