with sidestep improving and damage increasing overall would you say its gotten closer to DOA3.1?
Yes and no. 3.1 didn't have a sidestep the way 5 does. Instead, the freestep was so good that you could get around the sort of things that the SS is designed to deal with (hence why this site is called FreeStepDodge). The freestep itself in 5 is practically useless. In my experience, I've had a much easier time avoiding stuff with 3.1's freestep than I have with 5's sidestep, but I don't have the patch yet, so I can't comment on the changes they've made. It's definitely a step up from DOA 4's freestep, which might as well have not even been in the game.
The main thing that keeps 5 from being like 3 is that it's too stun heavy and emphasizes guessing on a far greater degree. If anything, I'd say that DOA 5 at this point is closer to a more solid version of DOA 4 than it is to 3. It's just a totally different approach to game design. Some people like that, some people don't. At the end of the day, it all comes down to personal preference and what you want in a fighting game.