OMEGA: It appears to contain pictures of Earthlings.
IOTA: There seems to be some sort of code.
THINK-TANK: (sharply interested) Code? I told you this was important. Describe the code.
OOP: It’s little lines and squiggles and dots — thousands of them alongside the pictures.
THINK-TANK: Perhaps the Earthlings are not as primitive as we have thought. We must break    the code.
NOODLE: Forgive me, your Cleverness, but did not the chemical department give our space  people vitamins to increase their intelligence?
The book that Omega had picked up seemed to have contained a picture of the living creatures on Earth. And according to Iota, there were some codes too mentioned in the book. Upon hearing Iota, Think-Tank replied that he was already aware of that and so that's the reason he asked them to pick up that particular book. Furthermore, he asked Iota to describe the code. Oop replied Think-Tank that there were little lines, squiggles and dots over the book.
In reality, Oop was referring to the letters written in the book. After listening to the code (letters) description, Think-Tank concluded that the Earth's creatures must not have been as ancient as the Martians believed, and he was determined to solve the confusion (letter code)
This was the first move that the over-confidence of Think-Tank had been shaken as, before letting him known about the code (letters) inside the book 'Mother Goose', he underestimated the planet of Earth and the creatures who live on it. It is now that he realises the intelligent side of Earthlings through their communication method (books). 
At that moment, Noodle intervened in Think-Tank and reminded him of the vitamins that the chemical department from Mars had prepared and given to the crew before they started from Mars. It was to increase their intelligence.
Indeed, the first written communication may be traced back to \(3500\) BC on Earth.
Meaning of difficult words:
CodeLetters, words or signs that were used to represent some secret message
Alongside Together with something
National Council of Educational Research and Training (2007). The Book That Saved The Earth - Claire Boiko (pp 63-73). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.