The thing with open source is that it's open. Which IL-2 game engine is not. If you have the skills and the time, you can change just about anything in it. On the other hand, if you have to change too much you might be better off just building a game engine of your own from scratch...
Aside from that, it's difficult to determine if the "dated" visual appearance is due to simplified or placeholder assets or game engine limitations.
A more serious issue is that FlightGear is specifically engineered as a civilian aviation simulation. That means you would probably need to do damage modeling, weapon systems and ballistics from scratch and seriously review the netcode to make sure it can keep up with the collision detection required for a combat simulator. I do know there's a lot of problems with it, but it is still an open source framework of a flight simulator engine - even with all its shortcomings.