It's pretty hard to misconstrue intent to sexually harrass when the boss mentions pubic hairs and uses the word "dong" at work to a female subordinate who is not enjoying such attention.
I started work before the sexual harassment laws were passed, and believe me, it was a zoo for women -- lots of inappropriate groping, flashing of private parts in the office and even in a restaurant with other co-workers present, sudden lunges and tongues down your throat (usually the ones with bad teeth or halitosis), you name it. Business lunches or obligatory office parties where there was liquor were the worst, even if the woman didn't drink. Or especially so.
This aggression was not limited to women who acted sexy; any woman, single or married, no matter how professional or unattractive, was fair game for some men. Even if the boss and co-workers were reliable, vendors or clients would try to take advantage, and threaten to tell the boss you were incompetent if you complained. Words truly can't express how sickening and often terrorizing it was, especially for the women who actually were raped in the workplace.
With regard to the pubic hair remark, I would think that if the object in question did, in fact, look more like a pubic hair than anything else, such a remark would be indecorous but not necessarily outrageous. I recognize that one shouldn't use such indelicate terminology in an office context regardless of what something looks like, but if it really did look like a pubic hair, I wouldn't think someone who said so was necessarily trying to be offensive.
As for the movie reference, was Clarence talking to Ms. Hill about it directly, or talking to someone else about it within her earshot, or what? And what exactly did he say? Here again, there should be a distinction made between conduct which is unwisely indecorous, versus conduct which is designed to be offensive.