Yogurt curdles at high temperatures. If you curdle a big lump of yogurt, breaking it up well is hard, and it doesn't taste too well. You want to end up with tiny particles evenly dispersed in the dish. So when you add it a spoon at a time, you can mix it really well before it has had time to curdle.
An alternative method is to do it the other way round. You remove a spoonfull of the curry and dump it into the yogurt, then stir immediately. When it is completely absorbed, you add the next spoon. You continue until you have something like a 1:1 mix in the bowl, then dump it into the still cooking curry and stir.
The second method requires less than 30 s between spoons, but isn't necessarily less work. (You may have to prepare a separate bowl for the yogurt). However, it produces even smoother results. If you have a problematic yogurt (low fat content, high clumping tendency), use the second method.
Edit HenrikSöderlund's comment makes me think that my explanation wasn't clear enough, so here an addition.
The yogurt will curdle a few seconds after it is dumped in the pot. The point is, you don't lumps of curdled yogurt. A lump of curdled yogurt is grainy and sour and doesn't mix well with liquid. Encountering a lump of curdled yogurt in your soup/curry unpleasant in a way similar to encountering a lump of undissolved baking powder in your cake.
On the other hand, A tiny droplet of curdled yogurt is too small to feel as grainy, too small an amount of acid to give you an unpleasant sensation, and small enough to form a suspension with the "broth". That's why you have to break up the yogurt in droplets before it curdles, and this is only physically possible when you start out with a small amount like a single spoon.
It is even more important to do that when adding to the dry-ish mixture described in the edit than when adding to a simmering broth. The broth is below 100°C, the curry base can be much hotter, causing the yogurt to curdle quicker. Also, a liquid will dissolve the yogurt easily and disperse it, but with the dry curry base, you have to rely on stirring only to reduce the yogurt to droplets.
Whisking some cornstarch into the yoghurt before adding it is an effective method to limit curdling and is also often found in recipes (caveat: can thicken the sauce more than intended). In other cases, some gram flour (besan) is added (caveat here: needs to get cooked in the dish for a couple minutes, or roasted beforehand, raw besan tastes vile).
Best Answer
You can't take the yogurt flavor out, what you can try to do is balance the undesirable flavors and smells out. This may or may not be effective but it's worth a try. You can balance the sourness with sweet and/or bitter flavors. You've added some demerara sugar which is a good idea, for bitterness you could add fenugreek if available. There are comparatively few bitter spices in most people's kitchens, but you will likely have instant coffee and unsweetened cocoa powder, and you may have bitters if you make cocktails. I would shy away from these though as the flavors they would add aren't compatible but YMMV.
If you don't have fenugreek (or you have added some bit it still isn't enough) you could try to add more curry spices like cumin, coriander, and mustard and try to overpower the yogurt taste. How I would do this is to put a small amount of oil in a pan and heat, then cook the spices in it for a short time, say one minute. Then add a couple of ladles of your cooking liquid, and simmer it for a 3-4 minutes before adding it to the dish. This will get the flavors out of the powder and help get them into the dish, if you just add powdered spices to liquid you can sometimes get a powdery taste from them, especially when using a slow cooker.
This may end up making your curry way too strong, even if the flavors are in balances, if that happens remove some of the liquid and replace it with weak stock or water.