First off, realize that there isn't as big a gap between the ability level of these two teams as it might first appear -- ignoring the sim's four walk-ons, the average team ratings for the players that will actually play against you average out to 36 Ath, 44 Spd, 32 Reb, 41 Def (with a 37 pass avg.) -- That's pretty on-par with your team numbers and indicates that this should be a close game.
The big difference I see here comes in IQ's -- you're running a zone/press hybrid and your team IQ average in both zone and press falls between C+ and B-. Your opponents' offensive IQ was a full letter grade higher and probably explains why you didn't generate a lot of turnovers. Combined with the above-average (for D-III) pass rating, that's going to get some open looks for the opposing shooters vs. the zone. I don't know how much practice time you're devoting on defense, but it looks to me like it could use a bump. (I play this same combo and have 20 min. in each)
You also let the Sim off the hook by not going uptempo. You distributed your minutes to avoid your players getting tired, but you didn't speed the tempo along to maximize the advantages a 12 vs. 8 game gives you. This is your biggest advantage, I think, but I'm not convinced you utilized it to its best in this game. Yes, he had two tiring players early in the second half, but as you go down, there's not much difference between the five he has on the floor vs. the five you have on the floor at any point in the second half. You never push him into the pretty orange and red colors vs. your blue and yellow that give you an advantage (in part because his top eight average to an 86 stamina...they can run for a while and not reach tired!)
The 7 TO's by your PG is a bit of a head scratcher, but overall I really don't think a 10-pt. loss here (inflated due to the intentional fouling late) is outside the realm of plausibility. The numbers make it look like a toss-up game and that's what it was until you went cold from the floor over the final 3:45.