That's exactly it. The team goes to a person's house, or to the locker room and they all shave their entire bodies. Sort of a ritualistic idea of what will make them become better. In my opinion such things like these are amazing for team building and bonding.
Our shaving parties were always coed and people could shave on their own if they didn't want to go to the party, but most did. They were at somebody's house and everyone was in their speedo or bathing suit. For the most part, everybody shaved themselves except for the places they couldn't reach, like the back. First, the girls shaved so much faster than the boys. It took me forever to shave my legs. Second, I had a girl shave my back and she cut off a mole that kind of stuck out. It was bleeding and painful, but not as bad as I would have thought. She felt horrible but I didn't make a big deal out of it and tried to convince her it didn't hurt. Then, the next week we had to shave again because we made it to regionals but by then I had razor burn so bad that as soon as I touched a razor to my legs they started bleeding. It was awful. We still had a fun time, but it hurt. They were very fun.
By the way, shaving does decrease times in swimming. I dropped a second in the 50 free and about 3 in the 100 free.
And no one shaved their heads or armpits or anything underneath the speedo. At least, not at the parties.
Our swim team has a shaving party the night before sectionals. We go to one of the seniors houses and shave everything not covered by our suits. If you want to shave that you get to do that at home on your own. Shaving all your body hair makes you go alot faster because it removes the dead skin and when you dive into the water for your event you dont even feel like your in the water and your whole body feels AMAZING and you go faster. Its 100% a mental thing. Our swim team tradition is that the girls aren't allowed at the shaving party only the guys are. And the upperclassmen take bets on which freshmen will cut themselves the most.