Could B-17 bombers identify individual ships in Midway?
Attacking B-17s would have a better view than reconnaissance planes and would be able to id a carrier by class...
Dedicated reconnaissance aircraft (as opposed to fighter patrols) would fly at very high altitudes and typically would avoid overflying large formations of enemy ships. First it was dangerous and second, they did not want the enemy ships to know they had been spotted. At high altitude and at oblique angles, identifying a carrier by its class while maintaining a specified distance might well have been impossible in some circumstances, even with binoculars.
B-17 bombers also flew and attacked at high altitudes, but by necessity they would have to directly overfly any ships they wanted to bomb, and the bombardier would be looking at the vessels through a bombsight providing some magnification. It is likely that the B-17s crew, especially the bombardier, would be able to identify a Japanese carrier by class.
That being said, other factors such as ship positioning, ship maneuvering, and defensive fire could make it difficult for the planes to launch an attack against the carrier of choice. The one B-17 attack that I know occurred against a carrier at Midway was against the Hiryu (you can see a photo of the bomb pattern on the Battle of Midway Wikipedia page. It shows you the resolution the bombardier would have had, which was easily enough to id the carrier by class). Whether that B-17 was after the Hiryu or would have preferred one of the larger carriers, I do not know.
In short, the game's mechanic for B-17 and reconnaissance plane identification and B-17 choice of attack isn't that unrealistic.
...but B-17s were poor in the naval attack role in 1942
The problem that the Army and Navy encountered was that although B-17s could bomb from altitudes at which many Japanese fighters could not even reach them, they were woefully inaccurate from the high altitudes that doctrine dictated they fly at high altitudes (c. 25,000 feet) while bombing and without the Norden bombsights they would have later in the war. The early estimates for the B-17 in a naval attack role was that about 1% of their bombs hit. This is due in large part to the difficulty of dropping bombs from 25,000 feet at a target that is both moving and maneuvering. The B-17s at Midway were completely ineffective. You'll note that the previously mentioned photo on Wikipedia shows a miss by more than the length of the ship.
Later in the war, with better bombsights and a change in doctrine to allow lower altitude bombing runs, B-17s were more effective in the Pacific, though they were never deployed to that theater in very large numbers.
So as far as B-17 attack rules go (which I realize is getting beyond the scope of the question), any game mechanic that assigns them a decent chance of hitting a ship in 1942 is not realistic, and if the mechanics give the B-17 an equal or close-to equal chance to hit as a dive bomber or torpedo bomber, then the rules are wildly unrealistic.