Woo said that the foot thing happens "during the act of passion…" then said, "Do this for me…" I think it's safe to assume they had sex.

I believe that Barrow was actually giving the widow pig ashes, which is why he makes up the story - he had sold her husband's corpse and cremated a pig in the last episode

the dialog was pretty similar too - essentially along the lines of "you and me, we're not part of their world"