Real Madrid's defense is actually good it's just that some newly recruited players cannot play when they lose to PSG and a number of other players are injured. This is what makes it difficult for Xabi Alonso to face PSG because there are no players who are in the best quality or experienced to be placed in that position.
In addition what needs to be fixed by midfielder because after Modric and Toni Kroos left there was no appropriate substitute figure for the two players so that the attack built by Real Madrid was not yet fully maximal as when the two players were there.
I don't think their defense is that good, a lot the defenders are getting injured that means they need it's a serious problem for them and they need to make them fit or get new defenders which in my opinion I think getting new defenders would be better for them. Facing PSG I knew they can't challenge them with that defense so I didn't much from them I was just surprised that they couldn't score. Real Madrid is not built by signing young players they are known for signing proven stars. They really need to get an experienced defender along side Huijsen it will help strengthen their defense.
You're right even the midfield needs strengthening as well, they need to get Modric and Kroos replacement to support the attack.