Absolutely fat loss will improve NBPEL (as well as NBPFL) — djrobins is right on in all his points.
Aside from visually having a larger penis for both flaccid and erect, losing weight will help give you the confidence to go out there and use the damn thing after your hard PE work! Who want’s a Lamborghini that’s just sitting in the garage up on cinder blocks, right?
If you’re undertaking weight loss, please try to include some strength exercises in there. Not only will basic strength training help speed up fat loss by burning calories with the exercises it will a) burn more fat by hopefully building muscle (which is metabolically active and will burn calories even in a rest state), b) it’ll help you look more toned and masculine (e.g., increase shoulder width to offset gut girth), c) even if you’re not doing much strength training and you’re on a extreme caloric deficit even just a bit will preserve muscle mass, and d) you’ll just feel like an awesome man-beast in general.
There’s tons of strength exercises you can do with zero equipment — pushups alone are awesome and work your chest, arms and shoulders, add in some simple lunges and squats and you’re working a lot of major muscle groups without spending a penny. Pull-ups and chin-ups are fantastic, too, but almost everyone struggles with them — if that’s the case, just try to hang onto a bar as long as you can and try to pull yourself up like a maniac. You’ll get there… or if you don’t at least if you’re ever stuck dangling over a spiked pit full of crocodiles you’ll feel confident in your ability to hold on until the rescue helicopter arrives. If you can get hold of a set of dumbbells, that’s even better as you can do a huge range of exercises for every body part — try to get some used crap off of Craigslist (or equivalent), if you’re able to do so. If you can afford a gym membership that’s even better still, just make sure to actually go to the gym and STAY OFF those damn isolation machines — use free weights and body-weight exercises when you can and you’ll be MUCH more fit for it.
Personally I like the strength stuff as it appeals to my sort of OCD/numbers tendencies (omg, you can track and measure everything!11!one!1!) but really what’s more important is that you can see and *feel* the results very quickly. More so than just dieting alone (which is miserable) or doing only a ton of cardio (yawn). It’s just simply more fun, and I was/am able to stick with it. Maybe that’ll be the same for you, too.
That said, don’t forget to do the cardio. Even walking 20min a day is good. Work up to a light jog, but be mindful of your joints and knees. If you’re carrying around a lot of weight that can cause unneeded stress/injury — try to find a running track that has some cushioning, or run on grass. Besides, your local track is a good place to meet women or at least serve as motivation to keep running and follow hot little 20something ass bouncing around the track. Kinda like a dog chasing the hare.
Maybe you’re aware of all this and I’m just rambling, but hopefully this is helpful somehow to you or someone. Definitely stick with it 2small — you can do it and you’ll feel and look better for it. :)