I’m personally not familiar with the Advaita Vedanta, as I’m more of a fan of Zen Buddhism rather than Hinduism, but I definitely agree that the ancient eastern mysticism is very compatible with this universe being a simulation. Some of the key concepts in Buddhism (especially its Zen variant) and Hinduism even served as direct inspiration for the Matrix movies. I think the most directly relevant one is māyā, or the world being an illusion.
Etymologically speaking, the term seems to have evolved from meaning “magical power” to “illusion” and “deceit”, either in the form of gods making people believe in what isn’t actually real, or of people pretending to have qualities that they don’t have. A simulated world would be exactly that — some “gods” using their creative “magical powers” to immerse us in a secondary reality that’s only a dim reflection of the true underlying reality.
Coupled with Zen observations, this view of the world implies the primacy of consciousness over matter, which is an idea that bridges the eastern philosophy with the most eastern of the western philosophers — Plato. In his view, looking at the material world is like looking at a shadow cast on a wall of a cave, while the real world is the one out there, where all the ideal forms of objects come from. Any virtual reality is exactly like that.