Alright, I watched the scene again. It goes

Shot from the side of the puppet show (this will need VFX too)
Wide shot of kids laughing (they could be laughing at anything at this point, could just be the narrator’s description)
Shot of the puppet stage (we slot in whatever VFX we come up with)
Close up of kid laughing (could very easily just cut this out)
Wide shot of kids looking in wonder
Rey watching (maybe slot in some cheers here)

So, looking at it, if you cut the close up of the kid laughing, you really don’t need to do anything crazy here. My final suggestion would be you see the walker on one side, and then Luke pops into frame on the other side. Alien says “Skywalker,” or like “Mastah Jedai Skywalker” some shit like that. Nothing too over the top, gets the point across quickly and efficiently.