"You're lots of fun" means "You provide me with a lot of fun". It then goes on to describe more explicitly the type of fun that she considers you to be. This involves you opening your arms and giving her some.
Basically, she wants a mind-blowing orgasm.
Don't blame me. Where do you find this filth?
PS: I note this is "You Spin Me Right Round", usually sung by a male; so substitute "he" for "she" in the above where appropriate.
- For Teachers