The matte painting in the background could be more realistic looking as well, although the scene in general still works because it's not supposed to be real anyway.
The picnic was Pike's illusion, but I believe to the viewers (and Pike, obviously), it was supposed to play as real (note his reaction to the city and Tango the horse), not surreal as in some strange dream sequence. He knew he was seeing what the Talosians wanted him to see ("We're in a menagerie--a cage!"), but it was sold as perfectly real, to the point he did not say something to the effect, "..this appears artificial". That painting was one of the few visually weaker areas of the pilot.
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