As far as I remember in the previous season also, that Real Madrid did not have good results in the group stage. But, in the knockout phase, Real Madrid really had very good results and of course, Real Madrid's results in the group stage and in the knockout phase last season were very different. Thus, maybe at this moment it will happen again but unfortunately, this season has a different format so that the team that only finishes in the top 24 and not in the top 8, then the team that finishes in the top 24 will go through the play-off round before entering the last 16. Thus, at least they will only have a tighter schedule and of course, it may also affect the fitness of each player. But yes,the point is that Real Madrid still has a chance to qualify further, I personally do not doubt the quality that Real Madrid has.
I agree with you that Real Madrid has good chance. Like you said they did not do well in group stage last season but they played much better in knockout phase. Although format is different this season with extra play off round I think Real Madrid skill and experience will still help them succeed. Busy schedule might cause some problems especially with players getting tired but I am sure Real Madrid will find way to deal with it and move on to next round. Their team has long history of being strong and adjusting to challenges and I do not see why this season would be different.