Remember, Rose was competing with Cal in the "I'm smarter than you" Olympics. Cal dismisses Picasso's paintings as "fingerpaintings" and is only relieved at how cheap they were to buy. Rose counters with "The difference between Cal's taste and mine is that at least I have some." She describes the paintings as being in a dream--they have truth but no logic. That has to make anyone laugh-- Cal and Rose as frustrated art critics.
And sorry, the Titanic is still not a phallic symbol. Yikes!