The way you played the opening led to an awkward position in the early middle game, around move 12 like you mention.
4.d4 is more to the point than d3. Be direct.
6.Nd2 is better than Nc3. Black could have gone Bg4 and that pin is annoying. Some general plans in the Italian:
The idea is often in some order the moves c3 Nd2 h3 Re1 Nf1 Ng3. You are bringing your knights over to the kingside and hopefully can land one on the nice square f5.
Don't allow your light squared bishop to be exchanged for a black knight.
Hold the centre together and look to play d4 (from d3) when it is safe to do it. Here as I say you could have played it on move 4 because 3.h6 by black is not so good.
7.Na4 was an option exchanging your knight for the Bc5 and then playing Be3 (after h3 so you don't allow Ng4).
10.Ne2 intending Ng3 and playing c3 was a better plan than Nd5.
And we get to move 12 and the position is pretty lifeless. You had to play Bxe6 I think and obviously you ended up hanging that bishop.
Watch some videos on the Italian game and the Giuoco piannisimo. The opening is full of subtleties which can lead to much more interesting middle game positions than what you got on move 12.
In this game by move 12 I had no idea what to do as to how to develop my queen and rooks or how to attack the opponent. Does anyone have any recommendations?
Here is the game