Amalia is thinking about writing a letter to a potential suitor, but gets distracted because Georg recently brought her ice cream when she was sick.
The fact that Georg brought Amalia ice cream serves as a signal to her that he is a good person and perhaps could be a suitable partner. Signaling happens all the time. Like in the song, it could happen where a person tries to signal to somebody else that he/she would make a good romantic partner, but people could also try to signal to firms that they are a good person to hire.
For a signal to be effective the person seeing the signal must recognize that the activity could signal success. Further, the activity that generates the signal should be costly, but less costly to those who are talented.
This is one reason a college degree is a good signal for many jobs – it isn’t cheap to complete (both in terms of money and effort) but it is tougher for those with lower intellectual skills. Other signals include GPA, the college from which a person graduated, and activities/leadership roles in college.