I felt like he gave the ball away quite a bit last night, and his passing was a bit off at times. But, he did open up space very well. His tackling was very good, too. This makes me think it may have been the Bernabeu jungle grass that the team had to play in that was causing him some problems. Hopefully in the return leg we see the Sergio from the manita classico, dude was a boss in that game.
As far as the diving goes, I don't really have a problem with it. He just needs to be a bit smarter with it sometimes. Usually he will win a free kick with his antics, but every now and then he chooses a bad time to dive and gives the ball away. He will master this as he gets older.