Sex.

Hamlet about to watch the play Mousetrap, acting crazy-sexy w/Ophelia (III.ii):

Hamlet: Lady, shall I lie in your lap?
Ophelia: No, my lord.
Hamlet: I mean my head upon your lap.
Ophelia: Aye, my lord.
Hamlet: Or did you think I meant country matters?
Ophelia: I think nothing, my lord.
Hamlet: That's a fair thought, to lie between maid's legs.
Ophelia: What is, my lord?
Hamlet: Nothing.

“Country Matters” = sex. Love this. And not so unusual, in terms of sex slang--like saying “the birds & the bees,” in use today, or using the word “rutting” sexually-- putting sex in the animal realm, etc. (James Ellroy used “rutting” a lot in the Black Dahlia, one of my all-time favorite books.) According to Shakespeare's Bawdy, "country matters" is also a play on "cunt" -- cunt was slang for vagina back then, as now. So the phrase is a pun wrapped in a euphemism. Excellently doubly-smutty.

Incidentally, "country matters" is not the only phrase in the above exchange that refers to female genitalia--"nothing" was also slang for vagina. More on that later.

Read about the etymology of the word cunt here--an interesting blog by a "recovering medievalist" and a former linguistics teacher. Also, here: this guy has an entire (and elegantly designed) site dedicated to the word "cunt," which includes etymology.

The above pics: The top is of King Henry VIII (note codpiece), the bottom is one his suits of armor (note codpiece), on display at the Tower of London. The exhibit is called "Henry VIII: Dressed to Kill." He died in 1547, almost 20 years before Shakespeare was born. But, codpieces were worn in Elizabethan England as well.

All about rock out with your cock out back then apparently.