Imo I find many people dont like direct democracy as they think the avg voter is stupid and uneducated which imo is an elitist statement.
I do think for major issues like Brexit or changing the constitution and such things there should be referendums.
Having leaders who get like 30% of the vote deciding such issues is far less democratic.
It would be ignorant to ignore the real reasons. Most AfD voters come from areas with close to no immigrants, low education and a bad economic situation. Another bigger part are former CDU voters who think the CDU went to much to the left recently. Both those groups have reasons for their fears and it indeed would be wrong to ignore it. That's exactly why it's good we have such a system, not only a two party system like in the U.S.
Just because Merkel's party only had 33 % doesn't mean she can decide everything...that's why they need coalitions and that's what the parliament is for. It's very democratic tbh.
Not sure what the system is like in Canada but if I remember right your parliament is one of the most diverse on this planet. You really should know what I'm talking about.