Setting up Pi-Hole on Asus router

Your debug log shows no problems with the Pi-Hole, so this is a router issue.

There are typically some DNS settings in the WAN interface section. For example, from the manual for an ASUS AC68R router (might not be your model), there is a WAN option to connect to DNS server automatically. This should be deselected, as your DNS server is on your LAN.

Also on the WAN, there is an option for Dynamic DNS - this should be disabled.

Also look for other options such as DNS pre-binding (disable that).

A better option might be to use the Pi-Hole as the DHCP server. When the clients get their lease from the Pi-Hole, they will be assigned the Pi-Hole as their DNS server. There are other advantages to using Pi-Hole as DHCP as discussed here: