How do I increase render distance for ground targets?

Sadly, no. Spotting of ground assets is a long standing problem in sim battles, and one (possibly) compounded by the visibility mechanic in the game.

How visibility works in WT is not exactly clear (mostly due to developers never fully disclosing that info; here's what they did share), but bottom line is this - when the game thinks your crew is unable to detect the target, it does not transfer said target's info from the server to your client. How exactly that is determined, and how it affects what you see differs depending on the game mode; as per what devs said, most things disclosed only apply to arcade battles, and isn't really supposed to affect SB and RB... but as many long-time players can attest, that is not the case -_- Mostly, detection of target depends on two things - obstacles that hide the target and distance. In AB, the stock crew detects a hiding vehicle (i.e. one that does not move or shoot) at around 750 to 1000 meters, depending on the vehicle used. You can upgrade the distance by leveling up vision-related parameters of the crew (that's the part that is not supposed to affect SB and RB).

So, since we can't increase render distance - how to deal with target-finding? Well, for starters, since you are playing air sim, the relevant targets will be marked on the map, and will always take the same paths. Thus, you can learn the patterns and move to the regions where you can find them easily. Second, in case of units that can shoot, you can watch for tracers and other effects, like tracks - those are often visible from farther away than the models themselves. For more advice, do a google search for "war thunder find ground targets from air sim"; the forums have scores of threads dedicated to this subjects, so you'll eventually find something that will work out for you.

And yeah, all that means your only real option is low-altitude lawnmowing. The only way to attack from altitude is to use big bombs with big splash and try to aim with the map. Results will likely be disappointing.