How I see this number done on stage is at the dance with everyone having a good time at the dance competition, girls in dresses and guys in cool looking clothes everyone dancing like they did in the 50s.
My least favourite song out of them all was probably "Dancing On The Moon". This song was my least favourite because it was slower and less like the others. Of course the song fits into the story line well and obviously if all the songs were alike it wouldn't be as exciting but that song just wasn't my favourite.
As for making "Dancing On The Moon" more engaging for the audience honestly I think the audience will enjoy it very much it's a good song and it's a nice moment between pinky and the fonz.