Imagine the following scenario. You're born with a slightly defective ability to oxidize fats. This means you tend to put on weight, especially if your parents think that fat babies are healthy babies. So you are a bit chubby as a child.
Because you're chubby, the other kids don't choose you for sports teams, and you get less exercise. That makes you even less able to oxidize fats, so you get fatter and fatter. That makes it harder and harder to get exercise. And that makes your body less and less able to metabolize fats.
Finally, your fat cells get full, and the fat you can't oxidize ends up in your muscle cells, you get insulin resistance, and you eventually develop type 2 diabetes. A vicious circle.
But there's also a virtuous circle, perhaps illustrated by the David Mendosa's successful weight loss (the link was written before he'd reached his goal). He lost a little weight with the help of Byetta and eating a lot less. The weight loss allowed him to get more of the hiking exercise he used to enjoy. And the hiking, even though it probably didn't burn hundreds of calories, probably helped him to burn fats better.
Burning fats better made him lose even more weight, which made the exercise even easier, and he now exercises about 15 hours a week. A wonderful virtuous circle!
His muscle lost fat, and his insulin resistance went down. The result was a thin man (a body mass index of 19.7, down from his top BMI of 40). He now takes no diabetes medications at all and has an A1c of 4.9.
So don't be discouraged by how few calories you burn with exercise. Exercise will help you burn fat. This effect of exercise may also explain why people who are able to keep their weight off long term are the ones who exercise.
Strenuous exercise like a couple of rounds of squash or a fast game of lacrosse will probably make you hungrier. But less-strenuous exercise like walking may not. If you have other medical conditions like bad hips or arthritis that don't allow you to do much walking, just do what you're able to do. Water exercises can be gentler than running or walking.
Exercise may be the key you need to get your diabetes under control.

