The "action" movie Angel, Connor, Fred, and Gunn see at the Drive-In is actually Courage Under Fire (1996).
This is the last appearance of the Groosalug in the series although he returns in the comics. It was rumoured that he would have a cameo in season 5 as one of the male models in Harmony's 'Musclely hunks' calender but it never came to fruition.