Aron Eisenberg considers this episode his personal favorite. Aron also mentioned in several interviews that a number of wounded combat veterans reached out and contacted him after the episode aired to compliment him on how real-to-life his acting was, since the episode dealt primarily with Nog coming to grips with the psychological trauma of being wounded in battle and losing a limb as a result of those wounds.
The title comes from the song "It's Only a Paper Moon" written by Harold Arlen with lyrics by E.Y. Harburg and Billy Rose in 1933. Though it was written for the musical "The Great Magoo", it became a jazz standard.
At the time this episode was made, Star Trek: Insurrection (1998) hit cinemas. The DS9 regular character Worf had to appear in it, which explains his sole appearance in the first scene, and why he's not in the next episode, Prodigal Daughter (1999).
This episode contains a couple of scenes from The Siege of AR-558 (1998) as flashbacks. One was a deleted scene, not seen in that episode: after Bashir puts on the song "I'll Be Seeing You", he goes to check on Nog, who inquires as to the song's title.
Vic says in one scene, "So... now that the Chief's told you I'm smarter than the average bear, will you stop messing around with my holosuite?". This is a reference to a 1960's cartoon character "Yogi Bear" who frequently and famously stated "I'm smarter than the average bear." James Darren, the actor who plays Vic, also provided the singing voice of Yogi Bear in a scene in the film Hey There, It's Yogi Bear (1964).