I really noticed against Real Madrid how much we had on them physically. We're nothing particularly special on that front domestically but maybe it's something we take for granted in Europe. Maybe it's why players like Gundogan tend to be far more influential in European games?
It might be a big advantage moving forwards. It's possible that's what Liverpool and Tottenham (and Chelsea and Arsenal in the EL) had as an advantage last season. Not having other English clubs to play could suit us if we're at our highest levels mentally.
Bernardo just said in an interview that Lyon and French teams in general are very physical. I think that was one of the reasons we found it difficult to play them, especially when we field Gundy and both Silvas. Lyon covered more distance vs Juventus than City against Real.
Then you have Bayern who are more of a physically powerful team than City.
Our main advantage is our style. Only Barca can match our ability to move the ball quickly but not our energy. Here your observation is spot on, imo.