The HAPPY FINGERS beanie that Davy Jones wears in the fantasy sequence was originally seen in The 5,000 Fingers of Dr. T. (1953).
One scene, with Peter Tork as Frogman and Davy Jones as Reuben the Tadpole, both satirical superheroes, have them fight the "bad guys" Micky Dolenz and Michael Nesmith. Cartoon lettered verbs, such as 'Rumble!" , "Plank" , "Plunk" , "Bing", "Bong", etc. spring onto the screen, an homage to then-ongoing version of Batman (1966), which showed similar words during fight scenes. At one point, Batman and The Monkees competed against each other in time slots.
When reading a made up story to the "Crocodile Corps" of kids, Micky Dolenz starts off with, "Once upon a time in the Land of Kirshner...", a sly reference to the show's music supervisor / producer, Don Kirshner. When Kirshner was fired just before March 1967 this line was changed in mid-summer re-air to "Land of Schneider...."
Joey Forman played a similar role on another Screen Gems property, Hoho the Clown (1967), just a few weeks before "Captain Crocodile" originally aired.
As The Monkees first enter the TV studio Micky Dolenz says, "This is the world of television," to which Peter Tork responds, "It doesn't look like a vast wasteland." This a reference to a 1961 speech in which FCC Chairman Newton Minow told viewers, "Keep your eyes glued to that (TV) set...what you will observe is a wasteland."