"I'm not euphoric, but we've taken a big step forward," team boss Wolff told ORF.
"We've freed ourselves from the midfield, and Lewis' pace was so strong that he would have been in contention for the win."
The big breakthrough, Wolff said, was with Mercedes' "understanding" of the porpoising phenomenon - but some are warning that the step made in Spain wasn't giant.
"In qualifying, Mercedes are still lacking quite a bit to Red Bull and Ferrari," former F1 driver Timo Glock told Sky Deutschland.
"At least they've come a little closer, but Mercedes now has to add another (upgrade) package."
Team boss Mattia Binotto agrees that Mercedes has not yet caught up.
"They've improved, and congratulations to the team for developing the car well," said the Italian.
"But if you look at Russell's gap at the finish, it was 30 seconds. And 7 tenths in qualifying, that's also significant.
"But I don't think we have to worry yet," Binotto added.
"But they are getting closer," the Austrian admitted. "And maybe it happens even faster than we would like."