Hello,
Yes, only the non hydrostatic version is relevant in that case.
You can try : SCHEME FOR ADVECTION OF VELOCITIES = 1
which will be less diffusive, but I see no real problem in your steering file, though the HORIZONTAL TURBULENCE MODEL would be better at 1 (constant value).
At least, to be sure that nothing is wrong and that your offshore boundary is boundary 1, you should see the salinity entering the domain when the tide is coming up ?
Regards,
Jean-Michel Hervouet