In the version we use in my group, Arty Works differently (we think the avalon hill arty rules blow goat cheese)
We leave AA guns alone as a game balance issue…
But on the issue of guns defending an AA we allow arty to fire back at the boats involved in an amphibious assault.
Also note, Arty is a 1/2 unit (with first strike) when paired with an infantry (otherwise they are 0/1 no first strike). So they only attack the incoming boats at 1. This allows Germany and Japan to build up coastal defences.
As for Islands stopping boats from going by…the ocean is too large for even the biggest guns to do that when stationary. You might catch an unwitting boat who didn’t know you were there once, but in the end there are hundreds of miles of ocean to cruise in.