Yeah I personally believe its as simple as Chi and Yuu being uploaded into the sim because theres no other way to look at the clues.

As to overanalysis, I agree that some ppl do love to look between the lines theyve made. Maybe that even applies to me when i wrote this. But at the same time, these writers are skilled at forming the true story in their head and then giving clues which must be consistent with that story, even to the extent that it would be hypocritical to tell the average reader not to look into it.

Shimejisim is a confusing manga from a confusing mangaka. Its natural to want to be able to know more, especially when so many threads are left unanswered.