The fact that the German conception of "Operational Security" was pretty much "Eh, surely they can't breach Enigma"...likely did not help. The Luftwaffe brilliantly informing one of its general whose son was on the Bismarck of the ship's destination in a message the British could intercept and read...well, it didn't help.
Yamato vs Iowa...is a much more complex issue than bigger guns and better armor, but ultimately depending on when in the war the duel occurs and what condition the duel occurs in, the Iowa has a very serious chance. Yes, hit-by-hit, pound by pound, the Iowa likely loses a pure gunnery duel at visual range (though Japanese shells for the Yamato were subpar). But the Iowa, unlike the Yamato, has a superb fire control-capable radar which enables it to make the fight at extreme visual ranges or even beyond-the-horizon ranges (it has the guns for it). Factor in the extra six knots the Iowa is capable of, and it can easily keep the battle at a range where the Yamster is fighting blindfolded but the Iowa is not. Top it off with the Iowa's superior rate of fire, and the fight becomes a lot more even than the sheer size and shell weight would indicate.
Now move the battle to, say, the waters of the Slot at night, or a situation where the Yam has the Iowa pinned down and unable to use its speed to dictate the range (convoy/landing defense, etc), and the Yamato's excellent optical fire control, heavier shells and heavier armor are very likely to prove a decisive edge.(Or move the battle earlier in the war, with a less powerful radar set on the Iowa making it harder for them to dictate the range).