The title, "Simulacra," means copies or imitations, and that word shapes everything in these few lines. The speaker addresses their own "woolly eye / and woolly ear," as if the senses were soft, fuzzy toys or stuffed things rather than working organs. "Woolly" suggests blurred vision and muffled hearing, but it also sounds a little like a child's plaything, tender and slightly silly.
The second stanza turns wistful. If we had been as wise back then as we are now, the speaker says, we might have become real. That echoes the idea of a toy longing to be made real, though the poem doesn't say so outright. The feeling is regret, but a gentle one. The speaker seems to see their past self as a kind of imitation of a person, going through life half-aware. The mood is quiet, affectionate and rueful, with a hint of humor that keeps the sadness from becoming heavy.