The comic strip "Little Orphan Annie" was still in active production and syndication by it's originator, Harold Gray, not only in the 50s, but until Gray died in 1968 and beyond. I imagine anyone reading the "funny papers" in their local newspaper would be as familiar with the idea of the comic as an icon as "Nancy," and far more familiar than they would comics like "Brenda Starr, Reporter." So in the 70s, when Wolfe wrote "Peace," LO.A. is still well embedded in the American common culture even though the musical was a year or two away.
Now, I was 3 or 4 years old when Gray died, so my initial knowledge of L.O.A. was only from the artist who took her over -- the experimental cartoonist, Ted Blaisdell. But I knew at an early age that some artist had taken over the comic because my Silent Generation era father (mid-30s at the time) loathed Blaisdell's style and said so one Sunday afternoon. He said the original artist drew Annie like a little girl and this guy drew her like a blob.
I suppose the employment of an experimental are artist followed by someone writing a musical based on the strip was all part of a parallel campaign to better capitalize the intellectual property.
However, there was a story that Wolfe told over lunch -- Michael Andre-Driussi feels like I was there but if so I have no memory of it -- about a young teen girl from the local orphanage who was hired by his parents in the early 40s to do chores. And one of the things she would do is tell little Gene stories. One was a weird science fiction story that Wolfe much later rediscovered in an old pulp.