What's the significance of The Touch?

Dirk sings this in the early 80's, 1983 I believe, while trying to make it as a musician. However this is an odd choice as this song was originally intended for The Transformers: The Movie, of all things. That came out in 1986. This movie appears to end in 1984, at least that the assumption.

So my question is what were they implying, if anything, by having Dirk sing this particular song?

My first thought, and I could be wrong as I'm not an expert on the music industry, is that songs are written by song writers and then picked up by aspiring vocalists who are trying to make it in the biz. Meaning this could've just been some random song Dirk picked out from the recording studio and used it for his demo. If this is the case, I find it funny that the filmmakers implied this song started out as some porn star's attempt at crossing over yet ended up the theme to a popular children's movie.

My second thought was that this was an actual song that Dirk wrote and created. Being as how cheesy the lyrics are, and how cheesy of a person as well as a singer Dirk is, it's fairly plausible this could've been created by him. Still, oddly funny to imply this song, originally created and sung by a porn star, found its way into a kids movie.

Third thought, and this is least likely, was that Dirk was given a chance to work on the Transformers soundtrack, however this was three years before the movie came out, and one year before the actual show. And who hires a porn star to work on a kids movie, even if it's just on the soundtrack? Besides, if Buck couldn't get a loan, Dirk sure ain't gonna get a gig working on a kids movie.

Or lastly, there is no intention with this song choice. Paul just felt like making Dirk be as corny as can be. And it fit the time period.

I feel like it was included for a reason and want to believe it existed in this movie's universe before it became part of the Transformers soundtrack. Adds a funny Forrest Gump moment, don't you think?