The first verse is about women who wear too much makeup and fill themselves so completely with physical vanity there's no room for a personality.
The second is about artsy pretentious people who do things like scribble a few dots on an oven mitt with cherry juice and call it magnificent, and then call Van Gogh a hack. You know the types.
The whole song, I think, is basically Gracie bitching about artificial, shallow, uninteresting people who go through their whole lives pretending to be something more than they are, hence the "Don't even change people... even if you can" chorus. And the "Laugh so hard you crack the walls line" probably is like, calling all these people she's writing about a big joke, sort of bashing them for taking themselves far more seriously than they should.
Anyway, that's my two cents. While we're talking about Greasy Heart, is there a piano on the studio version buried in the mix somewhere, or am I imagining it?