The song completely works for the scene, within the context of everything that surrounds the characters (Lily is also daydreaming about what if Holden were more like Dusty and vice-versa, which plays out later when Lily unexpectedly sees and is shocked by Holden wearing his Miami Vice inspired outfit for the opening of the Mona Lisa) , especially now that I was able to watch the video and listen to a clear recording of the song. I wonder whether the music supervisor, etc. chose the music before or after the scene was blocked and rehearsed? During post production? Or perhaps as soon as they got a copy of the script? It seems tailor made for the scene.
One thing about the video itself. Instead of watching that awkward dancing, I'd rather they just have a slideshow of 1980s Brian Bloom throughout the video, lol.
They are trying to haze her. That's what this is like: some sick sorority style hazing where she has to collapse and be 'vulnerable' and then she is embraced by the ghoulish mob telling her it'll all be OK...it's really bizarre.