Ah, isn't this a great scene! I love this silliness.
Okay, this selection has, like many sections in Shakespeare, layered meanings. On the first and most basic level, Malvolio is saying that he recognizes Olivia's handwriting, that's all.
On the next level, this is a source of comedy, because the letter is forged. It is showing that Malvolio doesn't know his "lady" as well as he thinks he does, or himself either. It is scoring on Malvolio, and setting up later jokes. Reading this, we can know that he's going to have something nasty done to him.
On the next level, Shakespeare's being subtly racy. He's slipping in some dirty jokes. Malvolio knows how his mistress makes her P's (her pee)? Yikes! And I will leave it up to your imagination to figure out what dirty jokes can be made with the other letters.