As for the simulation argument, well, we cannot say for sure as there are many things in the quantum world that are just plain weird. Impossible to represent on the computer. Then you have to deal with singularities that have been predicted to exist by math.
A computer only needs to compute things that are being observed... this has been known in video games since, forever
There is no reason for a video game to computer individual atoms, nor is there a reason for a simulation to compute individual atoms
We can already create virtual reality that is almost indistinguishable from actual reality, and we've only been using computers for ~40 years... how hard would it be to distinguish virtual reality from actual reality in another 100 years, or 1,000,000 years? How much more complex will the simulations be in a million years?
What would even be the point of traveling 1000 light years to another planet, when we can simulate it right here? (probably why we've never been visited by aliens)