To be honest Real Madrid is just a different team when it comes to the UCL and they play really well under pressure. I don't take it as a advantage Manchester city will be hosting them at Etihad. Real Madrid have mentality monsters and they know exactly how Manchester city will approach this game. Ancelotti only has one or two dilemmas going into the second leg against Manchester City, but if he wants to change the game, it might get a little trickier.
They are strong but a most dangerous risk for other clubs when facing with Real Madrid is, they get vague pressure that makes them a bit weaker than they are. Then the rest is, Real Madrid are so experienced to exploit some weak moments of opponents to score goals and get final winning. It's clearly that Real Madrid can not repeat it in all matches but many times, they succeed to do that and it is fearful challenge for their opponents.
I also read how Rudiger stated things that were not much different from what you said, that Manchester City in attack is not as strong or as dangerous as imagined, as a player, of course, he knows the real situation on the field and how the comparison between his Real Madrid club and his opponent's club really is.
Rudiger did succeeded with his defensive task in a first leg at Bernabeu but no guarantee that he will repeat that success at Etihad. Haaland is a very strong and dangerous striker and he can make game-changing moments not only with his shots but also with his key passes or assists. Let's see how Rudiger will perform in a second leg at Etihad.
However, it could be that his statement is just saying war to bring down the mentality of City's players in the second match later
Psychological battle before matches is part of a battle and sometimes it is very important. It potentially impacts squad choice and performance of opponent players in a real match.