Plot hole: The director of Radioactive Man says to Bart "we found our new Fall Out Boy. That's what I would say if you weren't an inch too short. NEXT!" But Milhouse is the new Fall Out Boy, and he's blatantly smaller than Bart. Bart was standing right next to Milhouse, so the director could see the difference.
Audio problem: After being hit with the nuclear waste, Ranier Wolfcastle says "My eyes! The goggles do nothing" without moving his mouth.
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.