He is the only player in our defense who can cope with top-level attackers. It is what it is. Every time we see Pique/Lenglet/Garcia against top attackers they are always making mistakes and losing the duels. With Araujo he has the physical tools at least and will never lose physically to any attacker.
His ball-playing abilities are not very good but his ball carrying is improving a lot.
Even if this was true, he could still be beaten tactically, mentally and technically, and I think he was, and I think he has been beaten physically too on a number of occasions.
I think his ball playing abilities are underrated in a way, he looks worse than Chiellini and he is worse than Chiellini, but it is a bit of the same phenomenon where he looks so clumsy but manage to solve more situations than you'd think... Especially when he can keep the ball to himself, as you point out, he can dribble his way out of trouble pretty well.
Yesterday, he really panicked a lot in the late stages of the game - he gave away the problem to someone else by just hoofing the ball away when he had time, and he also entered some tackles in a stupid way, just tensing up like an amateur and being easily beat, it looked a bit like a drunken, riled up fighter trying to punch a trained, sober boxer...
I think Xavi can utilize him and that he might improve a bit and find his place more when the team is a bit more settled on the whole, but I certainly don't think he'll be someone to build the defence around.