Regarding Din and the darksaber, it's worth re-watching the Rebels episode where Sabine learns to wield it (S3 E15). She also struggles with it, and the Jedi training her aren't surprised - there seems to be a degree of mental connection required for any light saber to be wielded well.
Din hasn't had the benefit of Jedi training and he just plain doesn't think about the weapon that way, so it's no wonder he struggles with it.
Regarding the episode in general, yes this was a great improvement. I really liked seeing Din's journey to the surface first and then Bo's. The clear difference in emotional impact between them was a great contrast, and this was, in general, very much more Bo Katan's episode than Din Djarin's.
Did anyone else immediately think "Morlocks" when those creatures ambushed Din?