The matrix argument is just the latest form of Descartes we are dreaming speculation, as well as Harman and Putman's brain in a vat thought experiment. I always liked that one, which is maybe why I can always remember their names. Descartes of course famously rejected the idea and proclaimed "I think therefore I am", but the common argument put forth by philosophers since is usually something like "we can never know, so it is not really terribly useful to waste time thinking about, and we should live assuming this is the base reality".

I would tend to think that if this is a simulation, the entire thing is probably happening overnight in some university, and the results will be quickly tabulated by some grad student (or whatever these roles are in the higher reality) so no one is going to be looking too closely at or judging my personal choices on anything.

I'd probably say the same for aliens. I do believe aliens are out there. But the distance is too large—I think the odds of them coming to Earth are fairly low.

That said, it is a useful way to try to make better choices, thinking that others in a higher reality are watching.

Rather than wondering if beings from a higher reality are watching us, it may make more sense to wonder if beings from a higher dimension are watching us. After all, if 4th spatial dimensional being exist, then they can see us just as easily as we would be able to see 2 dimensional beings. After all, we can look down on a square and see inside it; they would be able to look at a cube (our house) and see inside it. Maybe ghosts are just 4th dimensional beings that some of us have caught glimpse of.