In WW1, attacks on balloons were dangerous because machine guns and anti-aircraft guns formed a protective circle beneath the balloons. Therefore, pilots dived at a steep angle when they attacked. They did not attack horizontally.
The film is an adaptation of the play "Journey's End" by R.C. Sherriff, written just after the Great War. The setting is transplanted from the trenches to an airfield, but most of the characters and some incidents are almost unchanged.
When Croft and Capt. Sinclair inspect an S.E.5 aircraft, the latter says, "We had pups before." "We are damn lucky to get these". The "pups" is a reference to the Sopwith Pup fighter aircraft. It entered service in autumn 1916 and had been mostly withdrawn from service by the time the movie takes place, in October 1917.
The melody to the song "I'm Always Chasing Rainbows" is heard. It is unlikely to be this song, which was not published until 1917. The melody is based on "Fantaisie-Impromptu" by Frédéric Chopin and it is likely to be this that is heard, though most people would think of the first song.