Red section — This is the command that Bash will run. It will need to be properly escaped if you, for instance, use single quotes on the outside and then need to use a single quote inside.
Underlined parts — This is the important argument that gets passed from xargs to Bash.
The second 'bash' — Bash sets $0 to whatever this argument is. Its particular value isn't terribly important, but 'bash' is its default value. [Bash manual]