Two possibilities exist: either we are alone in the Universe or we are not. Both are equally terrifying. -Arthur C. Clarke
It's like living on a Pacific island 5000 years ago. There are definitely other people in the world but there is no way you can contact them.
Fair enough.
These distances only seem long to us because we're thinking mostly in getting to other stars in a single human lifetime, which is a pretty short lifetime even compared to some other organisms on Earth (like trees, not to mention organisms that can go in to stasis indefinitely, like the mushroom spores of Terrence McKenna alien contact hypothesis fame). Once you remove the limit of a single human lifetime, your reach expands greatly.
The many billions of years that the universe has existed should give an advanced civilization plenty of time to visit the entire galaxy, either in person or by proxy, without even having to invoke the possibility of FTL drives or wormholes.
... we are either alone in the simulation or we are not.
not alone? false dichotomy.
What if "we" are both alone and not alone. We are part of some universal life form whose elements prefer to be disconnected from the others for some periods.