I was in college when The Graduate came out and this was discussed for at least two full class sessions. We were also dicussing Chaucers Canterbury Tales at the time where one of the main characters was also cuckold.
A widely accepted variation of the meaning is a slang way to assure the state of things is entirely fine; an expression of reassuring goodness.
In "That '70s Show", Donna Pinciotti said coo coo ca choo as an end to a random string of rhymes while stoned.
I am the eggman, they are the eggmen.
I am the walrus, goo goo g'joob.
--The Beatles' "I Am The Walrus"
Hide it in a hiding place where no one ever goes
Put it in your pantry with your cupcakes
It's a little secret, just the Robinsons' affair
Most of all, you've got to hide it from the kids
Kookookachu Mrs Robinson
--Simon & Garfunkel's "Mrs. Robinson"
"Everything is all right." "No worries." "All is good."