I never said they were in the Denmark Straits. A U boat screen across the likely path of the Home fleet converging on the Denmark Strait perhaps. (1a)
Remember that in this ATL Operation Rheinubung is bigger. Raeder has his ships going through the Greenland/Iceland gap and is guessing that in the worst case scenario he would face a two pronged interception from the RN.
Why not put up a U boat screen across the likely path of a force sailing from Scapa to the southern exit of the Denmark strait?(1b) He knows the dates and times when his ships will emerge into the Atlantic and all he has to do is position his U boats in a good place for a day or two?(1c)
Arrgh.(2)
1a,b,c) Except that everything he was doing was on the QT until well into the operation regarding Hitler. Maybe he could get away with what he was doing regarding the surface fleet, OK.
But you are forgetting one very important personality.
Admiral Karl Donitz. The U-Boats were HIS babies, and the Convoy War his obsession. He wanted the entire Kriegsmarine war effort directed against England to be based on the U-Boat War, and essentially seeing the blue water surface fleet as auxiliaries supporting their efforts (as the Soviet Fleet one day would).
Moreover, most importantly from his perspective, he wanted U-Boats
mass-produced, which wasn't happening on Raeder's watch. And would never happen with the German Navy winning big battles on the high seas with their surface ships. Anything he did as you suggest would be merely in a supportive role, with the surface ships winning all the glory (and the Fuehrer's interest).
Donitz was in a war with his commanding officer over limited resources for naval construction. He knew he was never going to get what he wanted until Raeder was gone and he was the new Gross Admiral (though OTL it was Goering who convinced Hitler to remove Raeder).
Considering the relatively limited number of U-Boats operational in the Spring of 1941, it would have forced the shutting down of the entire U-Boat War to put every available (not returning to port, being serviced for return to action, under repair, or overhaul) sub in the German inventory to create the screen you suggest. Hitler AND Donitz would have gone spastic, since considering the relatively slow speed of submarines and myopia (as scouts) the chances of
any of them seeing any of those British ships, much less successfully engaging them in a torpedo solution, is extremely remote, to say the least.
Then there is the metaphysical certitude of Donitz finding out about Raeder's actions beforehand and as the loyal Nazi, rushing to Hitler screaming bloody murder about all the British merchant ships escaping cleanly to and from the UK for upwards of one or two months while the German Navy is setting up the creation of a submarine scouting screen.
That presupposes the Germans would be expecting to have no surprise whatsoever against the Royal Navy, who were supposed to be in Scapa Flow "counting seagulls."
2)
*Hole getting REAL deep*
EDIT: You know, nobody said the attack on the KGV couldn't have resulted in a combination of a harmless strike on the armor belt, and/or dud torpedoes. The Germans had a number of them early in the war.