I'm almost 100% sure red elephant is being used as an analogy for his penis. In the beginning of the relationship he's very attracted to her, but they're taking it slow. So, his "red elephant" is wet and long. Then, as their relationship deepens, and they still haven't had sex, the red elephant is turning blue (aka "blue balls"). By the end, I believe he's describing them having sex. In a sweet sort of childish way. I still find this song incredibly charming despite the innuendo.
I'm almost 100% sure red elephant is being used as an analogy for his penis. In the beginning of the relationship he's very attracted to her, but they're taking it slow. So, his "red elephant" is wet and long. Then, as their relationship deepens, and they still haven't had sex, the red elephant is turning blue (aka "blue balls"). By the end, I believe he's describing them having sex. In a sweet sort of childish way. I still find this song incredibly charming despite the innuendo.