Some pretty interesting reading here. I've heard some historians make the case that the North was simply better equipped for war because they had better road, trains, ships, etc. They could simply outproduce the South, move men and supplies more easily, and use their Navy to not only move supplies but cut off those from the South as well.
One of the economic problems that led to troubles was the advent of industrialization in the South which meant the ability to make their own mills, etc. Atlanta was important for the railroad shops, for example. It wasn't that the south didn't have resources, but that they were only just beginning to be developed. That industrialization, though was only a step away from not shipping cotton north, but fabric, a value added good and the margin would have been stripped from the northern industries who pocketed the difference.
If you can take a product from field to finished good, you collect more of the final value of that product. Supplying raw goods (baled cotton, for instance) is far down the food chain from cloth or clothing. With sectional friction, economic freedom was becoming more important.
At the start, the North had the resources of the Navy, the standing (Federal) army, the foundries and mills of the North, the mines (iron and other), and the ports (especially by keeping Maryland in Union control). That freed Northern ships for blockade duty, at least those who were not chasing commerce raiders and blockade runners, which is what made those doubly important to the war effort.
Consider the CSS Hunley
, the first purpose-built submarine to sink an enemy vessel in War (even though the Hunley
was lost on the mission), was built to try to break the blockade.) And the ironclad Virginia
, built on the raised hull of the Merrimac, also was built to break the blockade. Had it been used thus, instead of fighting the Monitor to a stalemate, even in that one battle, the die could have been cast until such time as the Union would have been able to get enough ironclads for the blockade forces. Then next innovation in the line of naval defense was the floating mine, credited with sinking more Union ships than sea action http://kms.kapalama.ksbe.edu/projects/2002/civilwar/battle09/scientist.html
Land mines were also developed (though they did not originate during the War Between the States), but little used. http://members.iinet.net.au/~pictim/mines/history/history.html
Land mines, in particular, were viewed as a coward's weapon. I'll spare you my comments on tactics.
While innovation was present, unfortunately the manufacturing capability was not yet developed.