So I will admit I was kind of confused by last nights episode, but apparently this 'art' that they draw is a real thing dating back to Craig vs. Tweek in 1999. And the images shown in the show were actually from an open call Parker and Stone put out.
I did enjoy the parts about the over compensating acceptance of the two boys and how Craig's Dad secretly wishes it wasn't his son. Those parts were good.
This article, while not safe for work, does a good job of explaining the background of the art and gives some insights into the episode that I didn't catch: