Penile means "about the penis" or "of the penis". You will almost only see it in doctor English or science English: a penile injury, penile surgery. Doctors like it because it is calm and exact. Ordinary people almost never say it to friends. A friend would say "on his penis" or would not talk about it. The word itself is not a rude word, but it names a private body part, so it belongs in a hospital, a textbook, or serious news. It does not belong in a joke, unless someone is trying to sound like a doctor on purpose.