Stretch It Out is a stretching action that is needed when the level of uncomfortableness exceeds the social norm. It is an expression to show how uncomfortable you are in a particular situation.
Two couples are hanging out. Boyfriend 1 says to Girlfriend 1, "Gosh...you're so annoying. Why don't you just shut up?!?" Due to this exchange of words Boyfriend 2 and Girlfriend 2 become extremely uncomfortable. In order to alert Boyfriend 1 and Girlfriend 1 of their discomfort they begin stretching various muscles in their body...."Stretch It Out".