Why was Bd3 better than Bc4 ?

In this position, I feel that the strong White pawn center is the key idea, and that the game's result will hinge on whether or not Black can successfully break up this center. I prefer White's solid center to Black's somewhat less developed and unharmonious piece placement.

I don't think Bd3 is any better. At this point, White would need to find a plan, or, more precisely, decide on a harmonious piece placement. Bd3, although currently restricted by the pawn on e4, does not get suffocated in the long run. Black has no way to prevent the space gaining e5, because the Black Q is misplaced on f6. e.g. a possible squence might go 8.Bd3 o-o 9.o-o d6. It's a chess game. White is going to play in the center and on the K-side. I can see White playing f4-f5 at some point, kicking away a knight on g6. Hard to say what will transpire.

Black has to somehow break up White's pawn center. That's not going to be easy, or even possible, in this position.

Yea, I recall thinking the Bd3 would be quickly unblocked once I checked the Queen with a pawn advance.  So, it felt like the better move.