In it, but not of it. TPM DC
Tony Martinez, marketing director for CrushGirls confirms to TPM that the image is not photoshopped (though a larger version includes a man in a bathrobe, and a woman wearing a Santa hat).
Democrats see an opportunity to use Farenthold to lampoon the GOP, which, with help from the media, has advanced the narrative that they've expanded the field of "in play" races ahead of November. Farenthall is supposedly part of that expanded playing field. The NRCC lists him as a "contender" on their website -- the same tier on which they once placed Nazi re-enactor Rich Iott. Contenders are one step below Republican "Young Guns," who stand the greatest chance of winning their midterm elections.
Ortiz has responded with a TV ad, featuring the pajama picture, along with other photos of Farenthold in party-mode.
On an semi-related note, The Crush Girls is one of the 184 things that Farenthold has "liked" on Facebook.