Just using a sphere at the tip of the dick for collision might make it smoother, just parent it to a bone

Are you using the dick mesh itself for collision or a collider mesh?

also this is cute and/or hot as hell.

cloth elasticity might be too high, or the resolution of the cloth mesh might be too high or low, check impulse clamping and set it as low as you can. (in self-collision settings)

for note, it only took that long because I fucking suck at painting and I just hyperfixate for hours on rendering and re-rendering tiddy and hims hears