I don’t like this explanation, because if you don’t know what wormholes are before, you might think wormoles are represented by the hole stabbed through the paper by the pencil.
Correctly stretching the paper to make a 2D wormhole is hard, but maybe you should just use a bagel or something
People are supposed to include the fact that the pencil can go through because (layman terminology abuse ahead) of the “shape” the space-time topology is presenting (or I guess being induced to present as, if Sci-fi hypothetical) before you get to the explanation of the pencil as craft/observer and how the hole is how that shortened path through the wormhole appears from frames of reference not the pencil.
I like the bagel idea but then you have to hold it all horizontal while explaining so they don’t see the hole too early and you’re then just left intently staring at your audience across a bagel held at eye height like a slowly hungering loon. Or so I’ve heard.