The Power conceded a 30-point quarter-time lead to the 15th-placed Fremantle, and was 66 points down early in the last quarter at Subiaco Oval.
However, following Essendon's draw with the Brisbane Lions on Saturday night and Hawthorn's loss to St Kilda, the Power remains half a game clear in eighth spot.
"It seems ridiculous that we're still in the finals race," Williams admitted after the match.
"We beat Hawthorn a week ago, and they're still in the race, Essendon are still in the race; we might as well take it if we can.
"We're an average team – there's no doubt about that – and unless we play to the absolute top of our game, that's the sort of result we get."
Williams said his side didn't give up, but, after a seven goal to two first term, the coach admitted he would have to address the side's motivation levels.
Port Adelaide kicked the first goal of the game on Sunday but was dominated thereafter, with Fremantle extending its lead at every change before the visitors kicked six of the game's last seven goals.
"We tried a lot of different things," Williams said.
"We were changing the ruckmen, we were changing the on-ballers, we were trying to put numbers behind the ball, we were trying to put extra numbers in the centre square. None of them seemed to work.
"Whether we were playing man-on-man or trying to play (a) zone, we couldn't seem to get them to turn over the ball."
Surprisingly, Port Adelaide won the clearances (40-35), had more tackles (66-55) and held its own in the contested possession count (111-126).
"We were flattered a little bit by the stats when it comes to the end of the game," Williams said.
"I thought their centre square dominated us for the first half of the game.
"We win clearances, we win hits, we win hard balls, I think [the sides] were equal in tackles ... that was a joke, they outplayed us."
While Williams wouldn't make any bold predictions on how he would approach selection this week and list management at the end of the season, he said Peter Burgoyne, Brett Ebert, Paul Stewart, Matthew Broadbent, Josh Carr and Steven Salopek were all in line for selection after his side continued its topsy-turvy season.
"With three games to go, we need to get our players feeling good. Probably half of them are feeling like they did okay today, and they probably did," the coach said.
"But the other half were so far from it that we'll certainly look at the available selections to try and change the side around."
The Power host Carlton at AAMI Stadium next week before clashes with the Brisbane Lions and North Melbourne to round out the home and away season.
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