When I am in battle, before I attack, it keeps saying I am feeling funky. What does that mean? Does it have any effect on my character?
It appears that you have been “Mushroomized“.
Mushroomization is a status condition caused by mushroom enemies such as the Ramblin’ Evil Mushroom. In the overworld, the mushrooms cause the controls to scramble positions while walking around and it also makes a mushroom appear on the head of whoever is inflicted. While in-battle, it may cause a character to attack a party member or heal an enemy. If the prompt “[character name] is feeling funky!” appears after you select your move, the effects will take place.
In other words: “Feeling funky” is the EarthBound equivalent to “being confused” in many other RPGs.