A late brace from Craig Bellamy handed City a 4-3 aggregate triumph over Danish club FC Copenhagen.
Hughes admits he was concerned at the number of chances his team were spurning until Bellamy finally broke the deadlock and put the game beyond Copenhagen's reach.
"We created a lot of chances tonight and at one point you think you're not going to get the one goal which would free us to play better," said Hughes.
"But we got it in the end and it was a decent performance."
Looking forwardHe added: "We keep trying to tell people we are very early in our progression but some people don't want to hear that.
"Where we are at the moment is right on track.
"We're delighted to have progressed in the competition tonight - a lot of big teams have gone out by all accounts so we'll see how far we can go."
City will face another Danish club, Aalborg, in the last 16 of the competition, with the first leg at the City of Manchester Stadium on 12th March.