How is it clear and obvious if you have to study it forever?
This one didn't fall into the "clear and obvious" category, since it wasn't a decision he made and then reversed - he just didn't see it.
Then he gets told in his ear, take a look at this handball. He takes a look, yup I missed that, I think its deliberate therefore pen. It doesn't have to be clear or obvious for him to give it in this case. That's how I understand the rule anyway.
Whether that was the right decision is a different matter. He does move his hand and leg towards the ball and in an unnatural position, but it was so quick it's really hard to be sure it was deliberate.
On my understanding, you are correct. There are two different criteria; clear and obvious errors and missed serious incidents. If this was the latter, he only has to decide if he thinks it was a penalty. I would have preferred it wasn't given, as I had Croatia in the sweep, but it seemed reasonable to give it.
I think Modric was a worthy winner of the golden ball too.