Carol facetiously calls Wilbur 'fuzzy wuzzy' because of his mustache. The currency of the expression in 1961 stems from a nursery rhyme, which in turn stems from Rudyard Kipling's poem by that title. The poem was written in 1892 lauding the bravery of Hadendoa warriors who fought the British in Sudan, Africa, during the so-called Mahdist War (1881-1899). While the nursery rhyme is considered innocuous, even endearing, and the expression, all by itself, originally carried with it a measure of respect, the term 'fuzzy wuzzy' has eventually assumed a pejorative aspect and evolved as a sign of disrespect with elements of racism.
In an attempt of avoid directly responding to Wilbur's questions, Ed feigns an interest in the prospects of a good season for the Dodgers, meaning major league baseball's Los Angeles Dodgers in the 1961 season. The team did have a good season that year, winning 89 games and coming in 4 games behind and in second place to the National League leaders, the Cincinnati Reds, who went on to lose the World Series to the New York Yankees 4 games to 1.
Ed suspects trickery on the part of Wilbur and utters the phrase "methinks something is rotten in Denmark." He's paraphrasing a line from William Shakespeare's play "Hamlet" (Act 1, Scene 4), wherein one of the night watchmen, Marcellus, upon seeing a ghost, states that "something is rotten in the State of Denmark."