Jewish Girl's fantasy
This movie is a female form of the the "Jewish Romantic/Sexual Fantasy" Trope that was common in movies during the 80s.
We have Baby, from a progressive, yet well-off Jewish family. She basically comes of age in this film, and has to make her choice:
The rich, effeminate, immature, spoiled, weak, impotent, neurotic Jewish boy (that her family expects to marry).
or
The handsome, athletic, mature, uneducated, tall, blue-collar, rough, "bad-boy" shegetz (male version of Shiksa), who oozes charisma and sex appeal.
Clearly Johnny was the "taboo" choice. After all, why would someone like him be interested in a frumpy Jewish girl out of all people?
This film is about two opposites coming together. That is what makes it such a powerful romantic fantasy. The protagonist is able to overcome her "tradition" and embrace new social frontiers. After all, it's the 1960s!