Question: How do Danny and Cha Cha know each other? He acts different around her and when they first met she said 'Zucko, baby'?
Answer: Danny and Cha Cha did date. While at the drive-in Sandy says "I still think you went together." To "go together" back then meant going steady, as in they were boyfriend and girlfriend. Danny is trying to pass it off as something less serious but he does admit "We didn't go together, we just went together."
I just think he didn't know what to say he was confused so he said what Sandy said.
She means went together at the dance.
I thought he was referring to the dance when they "went together" as in just dancing, as opposed to "go together" as in sleeping with each other.
Answer: They didn't date, just hooked up.
Answer: No one knows what kind of relationship Danny had with her. We can tell they went out, Danny's words, but no-one knows how intimate it was.
Chosen answer: It is implied that Danny and Cha-Cha used to date, and that she still holds a torch for him. Danny tries to pass off their acquaintance by telling Sandy she's a "friend of the family."
Michael Albert