I always thought 'clouting' in this case referred to clout nails, i.e. the man in the moon was mending St Peter's shoes.

I've heard another version with "Hammering" instead of "clouting". Either way, I've always associated it with cobblers. I'll rephrase that...

As it's meant to be a bit of nonsense, I guess it doesn't matter too much how you interpret it, really though.