The text says the Krishna-Uddhava dialogue is better than the Krishna-Arjuna one. Does it explain that this is because Uddhava's questions about governing a kingdom were more insightful?

While Chapter 18 does state that the dialogue between Krishna and Uddhava is considered "better than that is this one between Krishna and Arjuna," it does not provide the reason you've suggested. The text offers no information about Uddhava asking questions about governing a kingdom or that his insights on such topics were the reason for the comparison. Instead, Chapter 18 characterizes the instruction in the Bhagavat as "truly the loving speech of Nath," suggesting its perceived superiority lies in its loving and devotional tone, not its political or administrative content.