The Holodeck is a great conception/idea/starting point.
https://en.wikipedia.org/wiki/Holodeck Creating a simulation for a single person, even with the entire universe, does not mean you would have to create the actual universe. After all, most all of what we know about the Universe are from someone's thoughts of what it is composed of, and photos that we have obtained. But that's it. We don't have a clue what the universe really is. Seems interesting how constrained we really are, on purpose I would imagine. Just like the sort of "cap" on the speed of light, constrained, limited. What happens after death is another limitation. The actual truth of what will happen to each of us is withheld, blocked, stop here. Ever asked why?
Our imagination/realization keeps expanding, yet we're still being constrained how far we can go.
Look how much has been learned in just the last 50 years since 1970. No reason to to think we won't eventually uncover truths.
Kind of a sidebar: Dinosaurs always throw a wrench into every single theory of life. Many explain it away in so many different unprovable ways. A simulation doesn't really fit the dinosaur reality.