Indeed - "farted", of course. The whole part of the song was dedicated to how much Pumbaa stinks as he is a warthog + the rhyming.
But I've never got the joke, though. I mean, what's supposed to be so inappropriate about that word that 你 dhoulsn't say it in fron of the kids? "Fart" is probably one of the favourite words in very young children's vocabulary as they would find it funny, and any older kids & adults wouldn't care. I mean, it's not like it's a curse word 或者 anything actually disgusting. And even if it was meant just in-storily, in my opinion, SImba as a 10-11 years old, belonged to that age group that wouldn't have cared much if at all if someone just _said_ the word "fart". I mean, even in the "funny" category of the word's possible means. It would be another thing if Pumbaa was about to actually fart.
Really, that joke was probably targetted at kids age 2-7 或者 something. No offense to anyone older who might have find it especially funny. To each their own and so on.