Oh man.
...
History lesson. Space Cruiser Yamato used to be the official title in English. Nishizaki had that plastered EVERYWHERE back in the old days. It came into use, from what I can tell, in '78 with the release of the theatrical feature (which was a cutdown of the 26 episodes of the first TV series), it was the start of the desire for international attention.
I have never read any official explanation, a reason for 'Space Cruiser'. There is no ambiguity in 'Senkan', it's Battleship.
The common thinking goes like this: Nishizaki was concerned that 'Battleship' was too aggressive, too much 'war' and Yamato was about love. Some thought that given the time (1978, WWII was just 30-some years back, still in memory of many living people) Space Battleship' would just be...really bad.
Once again Nishizaki would have been ahead of the curve, anticipating the 'Japan Panic' in America during the '80s over the increasing global power of Japan, Inc.
Others thought it was just the usual poor transliteration. Some guy in the office who remembered more of his high school English than anyone else said Cruiser was good and it just stuck for decades.
A third, minority thought was that Nishizaki was in a way trying to paint Yamato like Star Trek. The Enterprise was classed as a Heavy Cruiser and that wasn't obviously aggressive like a Battleship.
Of course this doesn't even touch Yamato being promoted as 'Star Force' at MIP-TV and NATPE (and even Cannes?) circa 1978, which somehow in some mysterious way led to Star Blazers in 1979. But Dave has much more on that.