David Bret is a well-known and very respected idiot who has never been even remotely right (outside of turning that way in his cheap automobile).
Oh, I agree!
I don't know enough about Polari to say whether Bret is right or wrong, but consider something. If "reel around the fountain" means what Bret says it does, then the whole song is an elaborate joke. The song's fragile beauty would exist solely as a private joke, a way for Morrissey to sneak a slangy phrase meaning fellatio, with overtones of porn or prostitution, into a song about the loss of innocence. Maybe that's the case, but Bret's interpretation is a radical one. I don't think it's possible to listen to "Reel Around The Fountain" and not understand that its emotional impact comes from the earnestness and devotion carried in its tone.
I'm not sure either way. I can definitely hear the phrase as Polari. It makes sense. But it also totally subverts the emotional key of the song. If Bret is right, then Marr was way off.
I think, though, Morrissey has certainly employed the phrase fully aware of its original implications and (as ever with him) you can wring multiple meanings from it. He is a master of word play and innuendo, of course. Also, I think he would take great pleasure from, erm, slipping the phrase into song. I don't think this detracts from its overall sincerity - it is a song laced with quips and one-liners throughout: "two lumps please", etc. Somehow it transcends all these individual aspects and remains a work of rare beauty. The ambiguous meaning of "reel around the fountain" only adds to the mystery; it means whatever the listener wants it to mean after all. I do wonder if this layer of meaning somewhat explains his reluctance to resurrect it in live performance.