In this episode, a brief flashback of Spider-Man's origin is shown. The show was not allowed to do a full origin episode because a Spider-Man movie written and directed by James Cameron was in development and it was going to feature the origin story.
During the big showdown with Mysterio, Spider-Man remarks "it's like I stepped into a Ray Harryhausen movie!". Ray Harryhausen was a real life famous special effects artists for multiple films including Mighty Joe Young (1949), the Sinbad trilogy (1958-77), Jason And The Argonauts (1963), and Clash Of The Titans (1981) just to name a few.
This episode is adapted from the story seen in "The Amazing Spider-Man" (Vol. 1) #13 which was also titled "Menace of Mysterio" and featured the first appearance of Mysterio. The backstory to Quentin Beck/Mysterio is slightly altered with Spider-Man busting him on set and effectively ruining his reputation. This was done to the original story of Mysterio trying to ruin Spider-Man's reputation from the comics and make Spider-Man personally connected to Quentin Beck's motivation to become Mysterio.
This episode is co-written by Spider-Man comic writer Marv Wolfman who has Mysterio use creepy and surreal imagery and holographic illusions rather than relying on props and practical effects like when Stan Lee and Steve Ditko first introduced him.. The imagery and holograms were introduced in the comics in a two-part Mysterio story in "The Amazing Spider-Man" (Vol. 1) #197-198 written by Marv Wolfman.
The paper Peter is reading at the 17:54 minute mark has a 1994 copyright date, even though the episode aired in 1995 and has a 1995 copyright date in the credits.