Guaro is a slang term for aguardiente, a strong alcoholic beverage popular in many Latin American countries. It's a culturally specific word that you won't find in a standard textbook.
In the song, Bad Bunny sings, "Lo mismo bebo Moët que bebo guaro" (I drink Moët the same as I drink guaro). By contrasting the fancy, expensive champagne (Moët) with this common, local liquor, he emphasizes his authenticity and ability to be at home in any environment, from the luxurious to the down-to-earth.
Bad Bunny's "Caro" is a huge anthem about knowing your own worth. He starts by asking, "Me ven y me preguntan por qué visto caro / ¿Tú no ves que yo soy caro?" (They see me and ask why I dress expensively / Can't you see that I am expensive?). He's not just talking about clothes. He means his whole style, his confidence, his very being is valuable. He's completely unique, saying, "con nadie me comparo" (I don't compare myself to anyone), and he doesn't care if people look at him funny for it.
He gets really direct with anyone who judges him, asking, "¿Qué carajo te importa a ti?" (What the hell do you care?). He wants to know why people are so concerned with how he lives his life when he's not hurting anyone. The best part is the twist at the end. After talking about money and expensive things, he reveals the real point: "ser feliz nunca me ha salido caro" (being happy has never been expensive for me). He realizes that his true value comes from being happy and being himself, whether he has money or not.