You're absolutely right about the tank. He really should be a Soviet T-34 or perhaps a Panzer III. I should have redesigned him, but I guess I kept him a Type 90 for familiarity, even if it's incongruous.
The narrator is saying that he doesn't want to disabuse Erik's notion of them being near the coast - if they were near the coast, they would find it easier to orientate themselves, and navigate their way home despite losing the dogs; however, the narrator believes they are lost inland, but doesn't want to rob Erik of this one strand of hope he's clinging to.