Head coach Vern Cotter said Scotland's 26-23 loss to Wales was "hard to take" after a rousing finish at Murrayfield.
The hosts launched a series of high-octane attacks late in the game but failed to get across the line until Jon Welsh crashed over in the last minute.
"We needed to keep expressing ourselves," said Cotter.
"Once we started attacking I thought we became a threat. We can take a lot of positives out of the game but we have a lot of things to work on and sort out."
Wales' eighth consecutive win over Scotland leaves Cotter's men without a point in the Six Nations following the opening weekend loss in Paris.
Italy, who have also lost twice, visit Edinburgh in a fortnight.
"We need to improve on our high ball receptions but there is a lot of honesty in the team," added Cotter.
"It is a hard one to take. We were applying pressure and got ourselves in some good situations.
"We will use this game to move forward into the next game. We will look at developing our game, developing our counter-attack.
"There were marked improvements and we will keep working away."
Stuart Hogg scored a fantastic 70 metre run-in try early in the game to give Scotland a 7-3 lead but Rhys Webb crossed for the visitors and a 64th minute converted score by centre Jonathan Davies moved Wales 10 points clear.
Scotland came roaring back but failed to capitalise on their pressure.
It might have been different had replacement scrum-half Sam Hidalgo-Clyne not been penalised for a knock-on before centre Mark Bennett dotted down five minutes from time.
|4 (1)||Scrums won (lost)||4 (0)|
|11 (2)||Line-outs won (lost)||8 (3)|
|73 (5)||Rucks/mauls won (lost)||85 (5)|
|120 (9)||Tackles made (missed)||110 (13)|
|Provided by Accenture|
Prop Welsh did barge over for a second Scotland try and Russell's conversion left Cotter's men three points short, although there was still time on the clock when referee Glen Jackson blew the final whistle.
A "gutted" Hogg told BBC Scotland he had spoken to the New Zealand official but not received an explanation.
"I believe we still had plenty of time after the try was scored," explained the full-back. "We're really disappointed with that one.
"I just asked why but, as usual, got no answer.
"We were right in it until the bitter end but it's another game we have let slip."
Cotter said he "did not want to lose a lot of energy" talking about Jackson's handling of the match.
"Somebody will look at the referee display or decisions made on the paddock," said the New Zealander. "We have things to sort out, and perhaps they will have as well.
"There were three penalties inside their 22 in the last 15 minutes. I thought some of those errors might have been cynical as well and maybe deserved a yellow card, but obviously not. That is the way it is. We deal with reality."
Scotland have won just seven of their last 40 Six Nations matches but captain Greig Laidlaw has faith in the direction the squad are going in under Cotter's guidance.
"I felt it was a tight Test match," said the scrum-half, who kicked 11 points. "The result shows that.
"We scored a great try in the first-half but fell away a wee bit after that. We finished very strongly and there was six penalties in the 22. I was disappointed not to get anything out of that.
"It's very frustrating. We talked about small margins after the result out in Paris.
"We've got to keep working and improve our game. This group of players is becoming a strong team. I really believe we're not far away, and we need to keep believing.
"We've got a massive game against Italy at home and all that matters now is that we turn up in that game and get a positive result."