The water's blue, swallow the pill
Keepin' it surreal, whatever you like
The blue pill would allow him to remain asleep in the dream (surreal) world of the Matrix, and the red would wake him up, showing him the grim reality of the real world.
Frank is saying that the girl is choosing to remain there. She is choosing the blue pill of domesticated paradise over digging deeper into a relationship with the narrator, someone outside of her normal lifestyle.
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