Discutámoslo is the command form of "to discuss" combined with the object pronoun "lo" (it). It's an interesting word because it's a bit of a mouthful and less common than simpler verbs.
In the song, Becky G sings, "Discutámoslo con unas margaritas" (Let's discuss it with some margaritas). This line playfully suggests resolving conflict over drinks, adding a touch of humor and a relatable scenario to the lyrics.
"Bandera blanca" means white flag, and Becky G spends the whole song waving one. She is not pretending the fight is over. She just does not want to have it: "En vez de discutir hagamos el amor" (instead of arguing, let's make love) is her entire negotiating position, and she repeats it until it starts to sound like a plan. The bargaining gets funnier the more specific it gets. "Hagamos un trato y te doy la razón" (let's make a deal and I'll say you're right) sounds generous until the price arrives one line later: "Si tú me das un beso" (if you give me a kiss). She will concede the argument. She will not concede the kiss.
What keeps it from being smug is that she admits why she keeps coming back. The song opens on a couple who have restarted so many times she cannot count them, "Perdí la cuenta de cuentas primeras citas" (I have lost count of how many first dates), and she points at him directly: "El culpable de mis noches más bonitas" (the one to blame for my prettiest nights), before adding that the worst ones are his too. Then she slides into English for a verse, and the switching is the argument itself: "Tú eres mi type, te quiero for life" (you are my type, I love you for life) is how the sentence would actually come out. By the end the peace plan has become a flight to the coast, "Pa' olvidar vámonos pa' Puerto Rico" (to forget, let us go to Puerto Rico), which is either romance or a very well-dressed escape.