Yes, this does capture the embarassment of the moment. I like the capture and it was def. lucky your camera was in hand. The real icing on the cake would have been to have had a "fuller story" photo, so we could all share the moment and story that caused the momentary embarassment. As is though this is interesting...
I feel that for these candid grabs, things such as grain and other technical details can be forgiven a little. This said, I am not familiar with the packages out there, but there are some de-noising s/w that you might consider.
Thanks for sharing. These comments are all IMHO.
:-D