Well, that is easy.
During the entire SAO episodeincident:
- Families that are rather sensitive to the entire locked in a game story, would not necessarily follow what is happening in this world. They would rather visit the family member in the hospital.
- I am sure that for the first while that the majority of the people in the world were interested in the news to know what is going on. But just like today's society if someone hammers on one subject the entire time - you tend to turn the TV/radio down when the topic is about to be mentioned (Or in some cases you would zone out).
After the SAO episodeincident:
- Should this topic brought on by the media, they would most likely start of a conversation of all the people in the room. (And how many people that is up to date with technology reads the paper? Therefore I would conclude that the people in the game would not read more than a heading on a newspaper)
- These that played ALO - was most likely just happy for those that got out, and sad for those that didn't. (Or they were to absorbed in ALO to care about SAO)
As to why Sugu didn't recognize him: She is most likely part of the first group of people who rather visit the hospital than read the papers/watch the news.
And if all that fails you, then remember: It was for the story. No other reason needed. If everyone knows who your character is there is not much to write in a story now is there?