The version I learned when I was young (15/20 years ago?!) relates to GUESTLeeneia's explanation of bathing on a Saturday night to be clean for church on a Sunday, although I had to admit, I never questioned the origins/meaning of this song. The chorus we sung was:

Here we go Looby Lou
Here we go Looby Lie
Here we go Looby Lou
All on a Saturday Night

As a child this was a favourite of mine, because 'Looby Lou' was almost 'Louise'!!

Louise