I'm struggling to see the relevance in BHs analogies. Civilian society has always thought that way and if there is one similarity we can draw, it is from the times of the 1700s and 1800s and early 1900s when men died in thousands building canals, railways and working in terrible conditions in mines, shipyards and factories. The fact that they did is a stamp of the social values of their time - today that level of deaths would be unacceptable - for example had the Channel Tunnel between Folkestone and Calais been built by Stephenson or Brunel in the 1850s, we could expect several hundred men to have died; inside big engineering works of those days they simply did because no-one had any concept of safe working conditions, nor, more importantly, the social awareness to implement them. That the Channel Tunnel was built in modern times without one single serious injury speaks volumes for that and, I think, sets aside as not relevant the analogies BH used.
I mentioned the concept of "acceptable casualties" because IMHO it makes Cradock's thought process perfectly understandable. He was, after all, a life-time member of a profession that used that term on a daily basis. You said his thinking was difficult to imagine today, but I say it isn't. In his position, I wager that most military folks today would do the same thing.
A key point I haven't seen made by others so far (if it's been made, please forgive me) is that Cradock and the Admiralty were playing telegraph tag. Cradock started out as the boss of NAWI and was chasing
Dresden and
Karlsruhe, both of which started the war in his jurisdiction. Up in that part of the world, with numerous British colonies on direct cables to home, communications with the Admiralty were like both parties were checking their email every few hours or at least daily, so they both were on the same page and up-to-date. Part of this communication was for Cradock to pursue southwards, so he became the boss of the eastern South America area as he progressed.
But the further south he went, the worse his communications got. No British colonies, very few direct cables. And all this made worse by Cradock being at sea for a week or so at a time and visiting places with limited communications, all because he was hunting hiding places. So, by this point, there were considerable delays in communications both ways. It was like both parties were only checking their voicemail every week or so, combined with lag on any given message measured in weeks. Thus, Cradock was usually a week or 2 behind what the Admiralty was thinking, plus usually hadn't gotten everything they'd said even then. On top of this, the Admiralty wasn't telling him everything it knew, only what it thought he needed to know.
As a result, Cradock and the Admiralty soon came to very different ideas about what he was supposed to be doing. Cradock thought he was chasing just
Dresden, and was supposed to follow her around the Horn. For this purpose,
Canopus was useless except for guarding his supply ships. He was, of course, aware that von Spee was probably headed that way but, due to the lag in communications, wasn't expecting him there yet. Thus, he never understood why
Canopus had come his way instead of the AC he'd been promised but hadn't heard wasn't coming.
So, Cradock went up the Chilean coast and picked up
Leipzig's radio in the vicinity. Not knowing von Spee was in the neighborhood due to the lag in communications, he went looking for
Leipzig, which his squadron was quite capable of doing. But unfortunately for him, he found all the Germans. The Admiralty, meanwhile, had gotten (after some delay) Cradock's last batch of messages, realized his danger, and sent more clear instructions. However, Cradock had left in pursuit of
Leipzig long before they arrived, so never received them.
Now picture yourself in Cradock's sea boots. You think you're about to come to grips with 1, maybe 2 old PCs, which your squadron is quite capable of handling. But oops, there's von Spee and all his posse. Not only is he more powerful than you are, he's also faster, so you can't escape. Not only do you have to fight, you're probably going to get your ass kicked. However, for the next couple of hours, the sun favors you, but this will reverse thereafter. You also know that the Germans have nowhere closer than Wilhelmshaven where they can make any meaninful repairs or reammunition, so anything you do to them now is really going to hurt them in the long run.
So, what do you do?
IMHO, here's where the question of acceptable casualties comes in. You basically have 2 options: run away while scattering your force, or attacking now while you have the sun in your favor. If you run and scatter, it's likely at least 1, probably 2 of your ships are doomed before it gets too dark to fight, and they will go down individually so have little chance of inflicting much damage in return. That's not acceptable casualties. But if you attack now, while you might lose everything, you might also inflict telling damage on von Spee. If that happens, then you've taken acceptable casualites because you will probably put von Spee into internment due to irreparable damage. You're dead, he's alive, but to the people who sign your paychecks, it's a fair exchange of casualties. Spee is just as out of the game whether he's interned or sunk.
As I said above, sometimes there's nothing for it but to charge uphill into entrenched machineguns. IMHO, Cradock faced one of those situations. But anything he managed to do to von Spee was potentially a game-ender, and the only way to achieve that was to go all-out. Unfortunately for him, von Spee wasn't stupid and could tell what the sun was doing just as well as Cradock. So von Spee used his superior speed to stay out of reach until conditions shifted to his favor.
Thus, in the end, Cradock lost 2 ships and did insignificant damage on von Spee. That's the same result as if Cradock had run and scattered, but at least doing things as he did, he had a chance of accomplishing more. But chances don't always pan out--that's why they're called chances instead of certainties. Still, I can't fault the man for taking them, nor do I see anything remote or alien in his weighing of the odds.
IOW, I see no reason whatsoever to invoke concepts of honor or memories of Troubridge to explain Cradock. Given the hand he was dealt, logically he shouldn't have played it any other way. And who among us here hasn't done the same thing in the games? You've got
Koreyets and run into the
Chitose group, or
Atago and run into
Askold. Or a 30-knotter on patrol meeting I.SG. Don't tell me you don't try to inflict as much damage on the enemy as possible before you're blown to bits, in the knowledge that this MIGHT make things easier for your other units tomorrow.