The simple answer: that object is a Sivalingam, a name variously given to smooth elliptical stones (such as the sankara stones that Indiana Jones seeks in “Temple of Doom”) or to carved phallic representations. Yes, it is carved to look like a very stylized set of male genitalia. HOWEVER, it is not used for sexual purposes. It represents part of the generative forces of the Universe (the yoni, or a vaginal form representing the other part). Although not discussed in mixed company, it is a basic part of Hindu cosmology & tradition.
The “guy” in the background is an actor playing the part of Siva, one of the three primary aspects of divinity in Hindu philosophy (one of the Trinity, one familiar with Christianity might use as an analogue). Although it looks like the effects crew scrapped the idea of giving him 4 arms, he otherwise is made to be recognizable as Lord Siva, including carrying a Sivalingam and a vina (not an oud, although I did find the pun clever!) The fellow in the foreground represents Agastya Muni, the hero of the “Agathiyar,” an heroic Indian epic. This album is the soundtrack to a 1972 Indian movie about his life. I won’t get into the details – you can look it up on Internet Movie Data Base – but Siva is credited with creating Agastya Muni for the purposes of fulfilling a mission.
There’s the bell! Remember, big test on Friday; make sure you study and get a good night’s sleep. Class dismissed!