George needs to concentrate harder when playing golf. By telling a story during his own swing he has completely mis-hit his shot. He's only just caught the top of the ball and it is barely going 20 yards down the fairway. However it was the best he could do as he is using a low iron to get out of the semi rough. Getting on the fairway was his priority and he's done that.
Lynne is pulling the golf bag so it could be that she isn't even playing, but just getting a feel of the course before she starts this new hobby. George is the sort of man who would tell his wife to 'watch how it's done.' Lynne is wearing golf gloves though. She is either trying them out for size or practicing her magic tricks.
When Lynne tells her joke at the end she can barely get the words out with her own laughing. Look at the way she is patting her chest. She truly believes this is the best joke she has ever told. She is about to bend over, laughing to herself and slapping her own thigh in hilarity. George doesn't get the joke because the word Lynne has said, 'fore', sounds exactly the same as the word that George would expect to hear, 'for.' So George is merely laughing at the expense of Lord Blunderton, who now not only has an expensive car to repair, but also a marriage. He is also happy that Lynne is not concentrating on his disastrous approach shot.