I feel like Iwase only took the last thing Yamamoto said to heart. He's really convinced himself he can't beat a strong opponent.
As for Aoba I think he should stick to his strengths but he does need to improve in other areas and the only type of striking he should probably work on is counter striking. With some good counter punching techniques he could us his opponent power and moment against them. It probably won't get a K.O but it would stun them long enough to get them to the ground for a submission.