Your phone is fine. There is absolutely nothing wrong. That screen is based on a 100% scale. Since your display is only using 3%, that means your phone is in idle mode the entire time. Think of it like baseball. A player with 333 hits in 500 at bats is hitting .666. A player with 2 hits in 3 at bats is also hitting .666. While the average is the same, these players are far from equal. One has a much larger sample size, which shows the consistency.
Of course system is what is using most battery; nothing else is. Your sample size is too small.
Try checking that screen after you actually use your phone. When it sits idle for 3 hours, you won't get an accurate result. Play with it for a few hours. Browse the internet, play a game. Then you will see that display will take up a majority.
The Commandments of Android
1) Open RAM is wasted RAM - Don't use Task Killers
2) Cheap devices are cheap for a reason. Don't expect high end performance.
3) Boot Loop = Wipe.
4) There are no viruses for android.