You have it right, when german is powerful he can stand out (112) and when hes not he can hide.
In G42 but also G40 (variants) there are situations where you can demolish Denmark, if Germany is careless he cant defend both West Germany and Denmark. If potentially you could take over Denmark with the US and then the UK could move through and so then he has to defend 3 zones (and a SZ), not just 1. Since the number of zones to defend is ever larger than that (Norway Normandy, Rome) a weak or unsuspecting player may leave you with the chance to capture your choice of whichever is weakest.
However, Denmark is actually more strategic than WG and you can take WG back, so given a choice, a smart player will defend Denmark instead of either Germany or West Germany
US then UK can attack then stack on top of each other. UK planes and stuff can land in support.
If you can take it in force, and also demolish take WG (factory downgrade), then you are causing him major problems but this is not until later in the game. Even so, Germany can usually push you back and then its just a dance back and forth with Germany having x2 the cash of UK, so this is actually the worst way to attack the Axis (through the middle east or med is better, attacking japan even better).
if you want some variant rules, you could say that Denmark has the same rule as Gibraltar (subs can pass regardless of control). Its nice to make subs fun.