Re: Need native speaker's advice. We ____ him playing baseball.
"Looked at" is not as good as "watched" -- which is not an option.
"Listened to" is perfectly grammatical. Perhaps they are blind. (There was a character on a TV show who was blind but who loved basketball so much he could picture the action based on what he heard.) I also remember many hours spent in my room, which was over the garage and the basketball hoop was attached over the garage door. I certainly heard a lot of basketball playing growing up. I didn't usually actively listen, but I could have.
I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.