[Utsusemimaru is not so naive that he did not figure out what went on among the men in his company, though he had never experienced anything firsthand. And men in close quarters were wont to gossip, so yes, he does have a few ideas of what men do after speaking in thinly veiled language like that.
Odd circumstances or not, he does also remember the kiss (or rather, kisses) he shared with Hook with some fondness, especially now that he's feeling especially affectionate and daring.