> Because the Democrats don’t want to hear that they lost because they chose Hillary to run instead of almost anyone else.
If by “the Democrats” you mean “the center-right neoliberal Democratic establishment”, sure. The rest of the Democratic Party has been saying that was a deciding factor (though not the sole deciding factor; there are a number of things you could take away and flip the result) since the day after the 2016 general election (and predicting it even earlier.)
> I can see the Democrats making the same mistake again with Michelle Obama in 4 years’ time if they don’t win this round, I only hope she’ll be smart enough to stay out of it.
Michelle Obama has neither the general negatives that hurt Clinton nor (and there is no plausible way to change this in 4 years) the institutional establishment experience and position that positioned Clinton to win the primary in 2016 (or even the kind that enabled her to get close in 2008.) So, she's got neither what made Clinton powerful in the primary or what made her weak in the general. Once she's spent two and half decades out of the White House, half of them in the Senate and a few more in the cabinet she might acheive the former, but even then it would take something special to acheive the degree of antipathy Clinton has gotten from everywhere except the Democratic establishment, whether it's outside of the party or the non-establishment left within the party.
Plus, the rules that interacted with establishment support to facilitate Clinton's win in 2016 were abolishes almost immediately due largely to the influence the Sanders factions gained in the DNC despite not winning the nomination, so even a Clinton clone with an electorate with no hindsight to 2016 failures would have a harder time.
> On the other side of the aisle the Republican base was smart enough to send Jeb Bush swinging early on during the primaries, that’s why they now hold the Presidency
The Republican base wasn't smarter, the Republican Party just has different nominating rules. Like those in the Democratic nomination system that was operational in 2016, they generally tended (and this is by design) reinforce establishment candidates, but the two systems have different failure modes. The Republican system is designed to work by magnifying the perceptual impact of early victories, even narrow ones, epsecially if they are common across the early primary/caucus states; which usually, when the rules were set, were a matter of name recognition and establishment support. The Democratic ones in 2016 provided a more direct link to establishment support by way of superdelegates (which media tends to count in delegate counts from primaries though they are separate, which gives the establishment candidate an air of inevitability, momentum, and popular support beyond what is factually present.) The Republicans went into 2016 without a clear consensus establishment candidate, which combined with Trump's celebrity status allows Trump to reap the benefit of early victories.