At this point, Ilphyl has started to expect that Link doesn't really do explanations unless asked specific questions, and you just need to accept that is how Link is. They do notice the arm; Link might have noticed that one of Ilphyl's arms has an almost metallic-looking tattoo, albeit one less geometric and more like someone had written elven words in silver ink from wrist to shoulder. That tattoo may or may not persist when Ilphyl is in another shape.

"It's a picture of you. And... did you want to show me the lizards?"

That is really touching.