This is another part from the same show I clearly remember, but can't find the video...
Arnold: What does it mean hanky-panky?
Girl: Well, let's see if you know this...playing around.
At this point you can tell Arnold knows what the girl means, but he's acting naive and sly
Arnold: Playing around with what?
Girl: My goodness. Well, ummm...well...we may need a lil more time with you.