Real worlders don't recognize the Super Mario Bros. because Sega won.
In the AOSMB3 world, the 1983 recession wasn't as severe, and Nintendo never had a gimmick (VCR-style software loading and the lockout chip) with which to enter the North American market. The third generation of video games was dominated by Coleco (ColecoVision), Atari (Atari7800), and Commodore (Commodore 64) early on, until Sega (Sega Master System) drew away most of Coleco's developers.Bud is actually Iggy from Heathcliff.
The family resemblance is there due to both series being DiC cartoons. In the family tree, Norman's parents are Mr. and Mrs. Nutmeg, Iggy's paternal grandparents. Growing up, Iggy was given the nickname of Bud by his father. After their Mushroom Kingdom visit in "Mush-Rumors", Norman and his wife suffered from PTSD, requiring Iggy to move to his grandparents' house in Westfinster. His grandparents never knew about his nickname so they called him Iggy. He doesn't like talking about his experience in the Mushroom Kingdom or what happened to his parents but he hangs with Marcie a lot because she reminds him of Missy. Princess Toadstool starting dyeing her hair after the events of “The Beauty of Kootie”, which is why she’s blonde as Mario media progresses.
Cheatzy did say he’d used the wand to disguise Kootie Pie as “Mario’s dream girl”…a blonde with blue eyes. Sound familiar?