Every player in the game has some hidden ratings which will affect their performance, these vary from 'mental' attributes (ie. can he handle the pressure of big games, does he play better when upset or worse? etc.) to 'form' adjustments (which might be due to natural form or him being 'rusty' because of injury or jaded because of over playing etc.).
On top of this the relationships between players can heavily affect their performances - for instance a pair of central defenders who work well together will generally do better than two slightly more skillful ones who detest each other - etc.
The Assistant is designed to pick a 'reasonable' side but not the best possible one in any shape or form (so no its not that he's a genius

).
Finally - if you play a player out of position then he will play somewhat worse than he normally would - how much worse is dependant on his natural adaptability and also how different his 'out of position' role is to his normal one.
By that I mean a player who is a striker playing in an attacking midfield role will feel 'awkward' but be fairly functional, however put that same striker in a defenders role and he'll probably feel totally out of sorts and play much worse.
(exception to this DMC's and AMC's can play equally well in a standard midfield role)