The person quoted in this article[1] from NPR describes the stanzas "Mind the music and the step, and with the girls be handy" as referring to dancing properly with a lady.

Given the era it comes from I can't imagine that there's a sexualized meaning to the words. There was certainly bawdy stuff back then, but from what I've read of the era I don't think it was casually thrown around like it is in today's (US) culture.

[1] https://www.npr.org/templates/story/story.php?storyId=497026...