And Maggie Makes Three - S6-E13
Plot hole: When Homer is seen at work in the flashbacks (before Maggie was born), he is at his usual control panel in sector 7-G, but he only began working here when Burns made him safety supervisor in season 1, "Homer's Odyssey". Before Maggie was born he should have been working at the conveyor belt with the carbon rods, where we saw him in the first couple of episodes.
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.