Yes, the universe could be a simulation; but since it's the only universe we can observe, we have no way of comparing it to others and distinguish between "simulation" and what would be "reality". If we consider the simulations we do ourselves, we find that they're very, very different from reality, and much more abstract to optimize for performance. From what we can glimpse of the universe, it appears to be not based on abstract rules and models, but on comparatively few forces interacting with matter and energy, and giving rise to everything from the ground up in a near infinitely complex time evolution from, at least as how we think of it at the moment, a starting point.
To clarify it a bit: Think of a simulation video game. Even in the most complex physics engines the world isn't simulated by atoms interacting with each other and things like inertia, deformation, buoyancy or whatever you can think of being an emergent effect of those interactions of four fundamental forces. In the end, it has to be abstractions and approximations, and if somehow something sentient would be "inside" the simulation, it would quickly find the limits of its simulation. Could it, without further knowledge of the "outside reality", determine that it is, in fact, a simulation? Or would it simply accept that *that* is how their reality simply is since there isn't any way of knowing or possibly even understanding anything else? The question is first how that sentience inside the simulation works, whether it is part of the simulation and running by the simulation's rules, or if the sentience is somehow outside the simulation's substrate.
In a broader sense, this is how it is in our perceived "real" world. Or what we presume to be real. We simply have no way of comparing our physical reality to something "more" real, so we have to accept it for what it is. As of now it appears that the universe and all in it is the result of emergent properties of complex interactions between a nigh infinite number of particles and energy, and we can look further and further into the cosmos and closer and closer at matter and so far have not seen any evidence to the contrary. Of course one could posit that things like the speed of light in vacuum being, apparently, a hard limit for matter and causality being limited by the speed of light would be an indication of performance optimisation of a simulation. Or the quanitisation of energy and such. But there's not really a way of knowing.
In the end, this IS the universe we inhabit, and to us it makes no difference whether it's a simulation or not. It IS our reality, and the difference it being run on some incomprehensible computational substrate in a higher universe, or it simply being how it is, is inconsequential at least for now.
So far there is not really any evidence for a hidden world beyond our observable physical reality, but that observable reality is of course limited. Maybe one day we'll find something beyond, who knows. We have to keep looking.
