Yes, if I heard an explosion, I certainly would look up.
And being human, my mind would create images and scenarios, some of which would not be based in reality, and over time I would come to accept them as what actually happened.
Eyewitness testimony from much later is not good. Even asked immediately following an event, people get major details wrong, including the sequence of things that happened.
So it is easy to imagine people, especially those who have been convinced to "come forward" because they have read web pages that tell them about the plane being shot down, who would have, in their mind, without knowing it, reconstructed the events to their current perception.
What I would likely NOT have done is been watching some airplane flying through the sky, watching to see if someone shot something at it.
As an open question, does anyone know of any other aircraft recovery who's protocol was to blast all parts with seawater before uploading?
Yes, the mind can play tricks, but I see no reason why people's minds would "create" a missile if they saw a plane explode in the sky. I think a reasonable person that saw a plane explode in the sky with no missile trail to be seen would assume that something on the plane exploded, such as a bomb. There would be no need for the mind to "create" something additional for it to make mental sense.