Just because he was pulling away for 10 laps doesnt mean he was annihilating vettel on race pace lol
its more that Merc still had good pace at the end but its basically not possible to see what happened.
Frequently this year Merc have held on till after the first stint, largely because everyone knows pushing hard with the car that heavy and pitting early will mean longer stints later on which will hurt your race. Merc generally lose in the second/middle stint where they head backwards and then Merc have frequently actually had very good pace on a light car which isn't too surprising given the ultimate pace of the car, track rubbering in heavily by that part of the race.
Hamiltons last stint was insanely good, he didn't pit so had significantly older tyres than Webber, Rosberg and Alonso but managed to slice through the pack and stay in touch with Alonso and even close right up on him at the end.
What would have happened without safety cars and a "full pace" second stint/middle part of the race, who knows. Vettel may not have broken down without the tyres blowing, debrie may have gotten into his engine and caused it. If you assume it didn't and he'd have dropped out then Hamilton really did have a great shot, largely because Webber and Alonso had such awful starts. But thats the thing, had Alonso/Webber qualified/started the race well and Vettel not dropped out I don't think Merc could have done so well.
I really was surprised by that last Hamilton stint though, for older tyres he was incredibly fast/competitive.
To be honest I think its less that their tyre deg has improved so much, I think their overall pace has improved.
IE lets say RBR can qualify in a race at 1:30 and lap in race at 1:38, and previously Merc could qualy at 1:29, but lap in race at 1:39. I think its more a case of them moving up to a qualy 1:28 and lap in race at 1:38. IE their long run pace hasn't improved vs their qualy pace, their tyre deg hasn't improved, just their overall pace is improving to the point where their race pace is starting to match other cars.
A second ahead in practice is pretty huge in dry weather no matter what stage anyone is in, because in qualifying Merc have gone from early season to fighting for top 3 positions, to dominating completely to 1-2's and to beating Red Bull's in qualifying by significant margins.