You are a yuppie. Shoo.

Anyways...It seems to me that no one has bothered to look up this phrase. I have and this is what the definition to be:

dilly-dally-to waste time in hesitation or vacillation; loiter or dawdle.
From Webster's New World Dictionary

Now consider what Cloud was doing. He was dragging his as* and wasting time. Hesitating. And the Japanese word translated into 'dragging' correct? Well than this phrase, "dilly-dally shilly shally" was a perfect subsitute for the meaning of the word in the original script.
Tifa couldn't say 'dragging your as*' or 'wasting time' or whatever, because the translation had to be as close to the original script as possible, and thus it must be vague, as the original script was. I believe that this is an older expression and not used very often. So, many people would not know what it meant and it would seem very random and stupid to them.
I hope this has cleared some things up.