If I’m remembering correctly, the pink arms are because SpongeBob wants to be a body builder and buys stick-on muscly arms that (unsurprisingly) don’t give him the ability to lift heavy things. He tries anyway and they deflate to these sad pink things.
But this meme is related to the lyrics of the song Nine in the Afternoon by Panic! At the Disco (your eyes are the size of the moon)
Spongebob unraveled the entire universe in seconds. The only reason his inflated arms couldn't lift things is because the episode was funnier that way.