~Staring eyes. Gaping mouth.~
Yes indeed. That was a song and dance scene from the 1930s comedy The Cuckoo starring Bert Wheeler and Robert Woolsley, who were kind of the Farrelly brothers of their day (not really, but you get the idea). Wheeler & Woolsley, as they were known, often worked with actress/comedienne Dorothy Lee, who you see getting down with her bad self here.
The singer, in the role of 'Gypsy Queen', is Maguerita Padula but I'm afraid I can't tell you any more than that.
There is a poorly written synopsis of the film on Wikipedia, but it's so crap as to make the film sound even more confusing than this clip would suggest. Therefore I've taken the liberty of chopping it up so only the key words and phrases remain:
"A phony fortune teller ... Mexican resort ... gambling casino ... falls in love ... American girl named Anita ( ... lived with Gypsies her entire life) ... [gypsy] leader ...also in love with her ... wants her to marry the Baron ... money. Miss Furst falls in love with Bird after getting her wallet back ... kidnap her ... go back to Mexico to save their loved ones from the Baron and the Gypsies, and succeed in doing so."
I'm glad we're clear about how this scene fits into the plot now. But seriously - can't you see the theme of this vignette working brilliantly for a troupe performance?