Real-time oscillation-like noise filtering
Marcus and Ben have very clearly identified the problem: the signal is simply too small relative to the least significant bits (LSBs) of the "virtual machine"'s ADC. The sensible solution is to increase the signal by use of gain. From the provided plots, a signal gain around 100 would be a good starting value. Alternatively, the ADC resolution would have to be increased (> 4 more bits), so the LSBs would be smaller. In a real system, the first option would be the only feasible option, since amplifiers are relatively inexpensive and high resolution ADCs are most certainly not. Since the goal is real-time noise filtering, rather than Lazarus filtering, i.e., post-mortem reversal of fatal mis-quantization, dithering and signal averaging is ruled out.