You say you want to understand the result and how to get a better result. There are a few changes to your mindset which are first necessary.
(A) Forget about any expertise you may have from being a tester for the Wor in the East series of games. AE uses different algorithms and the forces deployed have different capabilities.
(B) There is a lot of abstraction in AE so you cannot directly transfer individual, specific historical outcomes to individual, specific game outcomes.
(C) The two outcomes at issue cannot be directly compared with each other because they are quite different. The only similarity between them is that they involve aircraft. Everything else is quite different; different targets, different operational circumstances.
(D) Not all the effects of air bombing (and the same applies to land combat too) is captured by the combat report. It isn't just a question of FOW, there is much which occurs "under the hood" and not immediately visible to the player.
(E) Contrary to your claim, the key point was not the lack of Allied CAP.
With those preliminaries out of the way, let's look at what you have provided. Note however, there is a considerable amount of info lacking to give cast iron answers.
1. That was not a particularly useful result for the Allied player. It definitely achieved much less than did your own daylight attack.
2. The Liberators bombed above your flak ceiling limit. There was no Japanese CAP. There was therefore nothing to degrade the accuracy of the bombers.
3. The atmospheric conditions themselves would not have been much, if any, of a degrading factor for the bombers. The main impact the atmospheric conditions had was on the number of aircraft able to find the target. Only 3 bombers found the target, not the entire squadron.
4. Add to the atmospheric conditions the fact that it was a night operation, flown by bombers without radar, the dispersal of the raid is an expected outcome.
5. The bombers dropped 30 bombs for only 1 runway hit and 1 (perhaps) destroyed Oscar. Even by that metric that is not a good outcome. Other metrics almost certainly would demonstrate in clearer terms the poor outcome for the Allied player. For example;
(a) how many Japanese aircraft were there at the airfield, of which only 1 appears to have been destroyed. This is a significant point to bear in mind as you make such a song and dance of the "heavily populated" Mandalay hex in your own day attack
(b) you don't know what operational losses might have been suffered by the Allied Liberator squadron, nor do you know how many Liberators remain available for a follow up raid
(c) you lost 1 VP, if the Allied player lost a Liberator on the flight home he would have lost 2 VP ; even if no Liberators were lost on the way home, I can't see how the Allied player should be pleased at the risk reward ratio of the operation
(d) you suffered no supply hits, no corollary damage to land units living at the base
1. The Japanese bombers flew into very heavy flak. This greatly degraded their performance. The British have a lot of good flak units with high ceilings. It looks very much like your opponent has concentrated his flak at Mandalay. That is bad news for you because if you try to fly above the flak ceiling, your bomber performance will be markedly degraded. If you fly below 10k, which is normally required to significantly improve your bombing accuracy, with such a concentration of flak, you will be shredded even more and still suffer major bombing degradation.
2. With such a heavy flak concentration, your opponent does not need to fly any CAP to severely degrade your performance. As I said above, no fighter CAP is not the key point.
3. You have no idea what is the fortification level at Mandalay. Fortification levels reduce the damage inflicted by an enemy attack. This applies not just to ground assaults but also air bombing. That the Mandalay hex is a clear terrain hex is in itself not a good predictor that your bombing will return "full bang for the buck".
4. You sent the bombers on a "ground attack" mission. That is almost certainly the wrong mission to have chosen under the circumstances. For the reasons given below, the far better mission would have been an "airfield attack" even if there were no Allied planes based at the Mandalay airfield. An airfield attack is a better way of achieving your primary objective, which presumably is the capture of Mandalay, otherwise why conduct a "ground attack" mission.
(a) from the 528 bombs you were able to deliver, if they had been targetted at the airfield, you would have achieved many runway hits, probably some airfield service hits and with some luck, also some base supply hits. That would be a good outcome for you because the damage must be repaired and therefore the engineers are not available for building forts. That will make it easier for you to capture the base by ground assault.
(b) you state it is late 1942. Presumably the monsoon is still in season. The monsoon season severely restricts the flow of supplies. The supply flow rate is dependent on the level of infrastructure development. Hence damage the airfield, you retard infrastructure development. Reduce the available supply, again the easier it will be to capture the base by ground assault.
(c) bombing an airfield targets not just aircraft stationed there, but also dishes out corollary damage to the support units. This is very significant when attacking a concentrated flak area. The support units targetted include pure AA units plus Base Forces which also include significant AA weapons. Based on the info you have provided, your first priority at Mandalay should be to degrade the flak, not the infantry/armour located there.
6. A higher DL on Mandalay will improve your bombing returns. You want to maximise your DL at 10 using dedicated recon aircraft.
7. The atmospheric conditions were much better than those which applied to the night bombing. The atmospheric conditions would have assisted greatly in maximising the number of bombers arriving co-ordinated. I direct you back to what I said regarding the effect of the night conditions. Again not a particularly important damage multiplier for the day attack.
8. You have absolutely no idea how much disruption your "ground bombing" caused. It is quite likely you caused significant disruption but if you were not in a position to immediately follow up with a ground assault to take advantage of the disruption, you have wasted the entire air operation. For given good supply levels and adequate support, both of which appear to be present based on the info you have provided, disruption is quickly recovered. Again another reason why preference should have been given to conducting airfield bombing.
9. Very rarely are devices destroyed outright. By far the most common sequence is a device is damaged first, and only if an already damaged device is hit again is it destroyed. Again, given good supply and support levels, damaged devices are relatively quickly repaired.