Hi! You totally DO understand it, it seems!
Yes, the ruleset was Melee Mayhem meaning only melee monsters could be used. However, this week's Battle Challenge was to use the War Chaang (the elephant) which has both melee and ranged, allowing it to be used in this battle and giving quite the advantage.
And you are quite astute to notice his ever-so-slightly better deck than his opponent, and the use of a Legendary.