Yes, but unfortunately, there are many measures to choose from, and you can't possibly tell which is correct until you've visited Permutation City and at least a dozen of its suburbs.

I agree with the question. It may make sense to attach "probabilities of existing" to universes arising in a chaotic inflation model, but not, I think, in an "ultimate ensemble" multiverse, which seems to be the one being examined here.

But, to be honest, I had never even considered the possibility that a particularly large bubble universe might contain a simulation of a much smaller bubble. Inflation, as I understand it, does make it possible for a simulation of one small piece of physical reality to encompass an entire isolated 'universe'.

Not yet, as far as I know. Big World cosmology seems to be going in the right direction, but it's not yet understood well enough that we should be coming to any epistemological or ethical conclusions based on it.