Why it fixed the problem is an example of how many, many things in aerodynamics are just flat out UNFATHOMABLE.

Aileron differential is usually done with cambered wings. It is done by rigging the down going aileron to move less, and the upgoing one to move more. That insures that the inside wing will induce more drag and the outside wing induces less drag.

You understood correctly why differential is needed. Some of the reasons anyway. And how differential is usually done.

Why did the D7 work better when it shouldn't have? In theory, theory and practice are equal. In practice they are often not.