In a very Fringe style, an episode that started out like a standalone was expertly used to explore a character's backstory, and from that character, the episode was skillfully turned around to propel the main story arc forward.
The episode starts with Walter being interviewed by an old "friend," the director of the mental institution he resided in for 17 years, performing a monthly evaluation of his former patient. Aside from hovering the threat of re-institutionalization, the session summarized the issues the ethereal presence of a man (Peter) has been having on Walter and was our cue that we were finally having a Walter-centric episode.
Episodes of Fringe involving children (and teenagers) have always been well crafted. To explain this track record, beside the sheer skill of the writers, there is the great chemistry between the regular cast and the younger actors, but there is also the casting of those child actors themselves. Just like the young actress who played Olivia last season couldn't leave anyone indifferent with her tears or her smiles, Evan Bird (who plays Aaron Sneddon here) has a face perfectly conveying a sense of loneliness, fragility and a hint of perpetual fear in his wide eyes.
By the time Aaron got to the lab and was left alone with Walter, the viewer could see the writer's design as far as the exploration of Walter's past is concerned, but the show was still very much in control on the story about the fungus. From what we had seen, it was only natural to think that the young boy was directly responsible for the deaths. The episode did an excellent job developing the sentient fungus theory before later turning things around a little bit with Aaron having a hold on the organism and not the reverse. That story easily held the viewer's attention because the subject was interesting and the team was running out of time. Lincoln's oversimplification ("giant brain") was smartly written, and Olivia's stopping him from stepping into the room was a good example of a difficult decision well built into the story to show how experience with fringe events trumps empathy or the general desire to do good. The only weak moment of the fungus storyline was when Walter tried to convince Aaron to sever the link. What Walter said was very good and to the point, but Aaron's replies and subsequent success assumed a connection which nothing we had seen had prepared us for.
It was sweet to see Walter bonding with Aaron and opening up to him. We learned that he lost his very young son Peter and crossed to the other universe to try and save the alternate Peter who drowned in Reiden lake upon re-entry. No help (from an Observer) this time around. This event explains why Walternate would have "plenty of reasons" to be angry with Walter in this timeline, and because Aaron was very close in age to his dead son, it also explains why Walter had a hard time agreeing to lose "Peter" for a third time. Olivia immediately picked up on the mistake Walter made, using his dead son's name when referring to Aaron.
The connection Walter and Olivia shared at that moment was later properly developed in the touching and carefully constructed final scene of the episode. Revealing that Olivia has also been seeing Peter was not only reassuring for Walter's mental health, but was a brilliant way to leap forward on the current overarching storyline on Peter. Basing a search for Peter on the hallucinations of a mentally unstable man would not have made sense. Even Walter himself could only conclude he was going mad. Now, with this simple yet consequential additional fact, the main characters (and us with them) can really embark on a quest.
For such a deep episode, "Alone in the World" was also surprisingly funny, much more so than the two preceding episodes. After Walter summarized how he lost Peter twice, Aaron (who clearly did not buy into the alternate universe bit) said, "And you don't think you belong in a mental institution?" That was well delivered and drew more on the specific case than the other moments, which drew their humor from established behaviors of regular characters. For example: Astrid's translation of Walter's extravagant theories to Broyles with a simple "He doesn't have any theories, Sir" was clever and funny, just like Broyles's Gus moment. When it first appeared Walter had nicknamed the fungus "Gus," Olivia slightly reacted to the name, but the minute the word was uttered around Broyles, any regular viewer knew we would have a moment.
Besides the final scene, where Olivia revealed she's been having dreams of the same man Walter has been seeing, there was another subtle parallel between herself and one aspect of the story. At the beginning of the episode, when she calls in Lincoln and offers her help if he is "freaking out" because of so many fringe things new to him, she displays the same fragility, loneliness and fear that Aaron conveyed in the scene just before. Although she is posing as the one who is trying to reassure, Lincoln's attitude and Anna Torv's excellent portrayal of a fragile and endearing Olivia, very different from Fauxlivia last weak and also different from Olivia in the previous timeline, is remarkable.
Now that the new timeline has been, for the most part, covered and the two universes have been introduced, the writing only needs to take care of what will help in the development of the main story arc and in that, "Alone in the World" did almost everything right.