I found the file you were talking about. Are these what i'm looking for that I need to edit for Capital Ship armor mitigation?
DamagePercentBonus:CAPITALSHIP:CapitalShip 1.0
DamagePercentBonus:CAPITALSHIP:VeryLight 0.25
DamagePercentBonus:CAPITALSHIP:Light 0.75
DamagePercentBonus:CAPITALSHIP:Medium 1.0
DamagePercentBonus:CAPITALSHIP:Heavy 1.0
DamagePercentBonus:CAPITALSHIP:VeryHeavy 1.0
DamagePercentBonus:CAPITALABILITY:CapitalShip 0.75
DamagePercentBonus:CAPITALABILITY:VeryLight 1.0
DamagePercentBonus:CAPITALABILITY:Light 1.0
DamagePercentBonus:CAPITALABILITY:Medium 1.0
DamagePercentBonus:CAPITALABILITY:Heavy 1.0
DamagePercentBonus:CAPITALABILITY:VeryHeavy 1.0
Also, yeah its probably slightly too powerful for the cost reduction, but as it stands by default, my general opinion on Capital Ships is that the cost does not justify the gains, especially due to crew research. It takes so much time and resources to research both the additional crews, then build the actual ship, that it leaves you extremely vulnerable due to the fact that almost all other production and research needs to be halted just to save up for them. And as one above poster said, they are just ultimately underwhelming, especially mid to late game when you could just quickly throw a ton of LRMs at them and then move on. And since I am trying to emulate the role of Capital Ships in the 2nd World War, I'd want them to at least reflect some of the same potential and effectiveness in the game as well.
If I went too realistic though with it, a Capital ship could take out a moderately sized fleet of frigates with ease before they even got in range to fire if they did not have the assistance of a Capital Ship themselves.