First of all the hadith you mentioned is among a lot of ahadith which lead to the conclusion that there's a 'awrah between spouses which are all qualified as da'if or worse so one is not recommended to use them as evidence nor to conclude a ruling from them. Another one is that of Sunan ibn Majah (which was compiled by al-Bazzar on the authority of 'Abdullah ibn Mas'oud -see here, but includes Mundil ibn 'Ali مِنْدَلُ بْنُ عَلِيٍّ a rejected narrator in the chain) you may read more in the linked fatwa.
Note that al-Bazzar (see here) already considered it as da'if saying:
وإسناده ليس بالقوي
which means that the narrator chain has some weaknesses, it was also compilled by imam at-Tabarani in his al-Majma' al-Awsat, and quoted by abu Bakr al-Haythami in Majma' az-Zawa'id where he considered the narrator whom at-Tabarni himself pointed at the fact that he is the only source narrating this "Yahya ibn Ayub يحيى بن أيوب", as unknown which is a clear weakness in the narrator chain. Both al-Bazzar and at-Tabarani are compiling the hadith on the authority of abu Hurrairah via approximately the same chain and the only different narrators are trustworthy.
The wording used is:
إذا أتى أحدُكم أهله ...
Which was also translated if one intends to have sexual intercourse in this hadith others translated it more literally when having intercourse. Both meanings are valid because you may have intercourse directly or you may consider the foreplay as part of the intercourse for the second option and this way one can find an explanation for both meanings. As foreplay is considered as part of the act of intercourse if one has in mind that it is decreed in the Qur'an(See for example Which verse in Quran Chapter 2 talks about female sexual pleasure?).
"أتى" literally means came or came to or arrive or does one could also add the interpret it goes to.
Note that the majority of scholars say there's no 'awrah between spouses, but one should fear and respect Allah and the angels which are around us, so walking around nakedly if nobody sees you is something which might be allowed, but one shouldn't do and so spouses should keep this to the necessary minimum.
So the answer of your question is that being naked in front of your spouses per se is halal, but it shouldn't be practiced in an exaggerated manner and you also could be more or less naked while having intercourse or even foreplay, if you both feel at ease.
In a hadith compilled by at-Tabarani in his al-Mo'jam al-Kabir, 'Othman ibn Madh'on -a sahabi()- said to the prophet () that he feels shy if his wife (or wives) would see his 'awrah, the prophet answered why do you feel so if Allah made you both a clothing for eachother... this is a reference to the words of the Qur'an:
... They are clothing for you and you are clothing for them. ... (2:187)
which are about intercourse between spouses in the nights of Ramadan!
This hadith is marfo' and has some weaknesses as it is also questionable whether or not is mursal. But a better evidence and its explanation can be found in my answer on What did Abu Dawud mean by "nakarah" in regards to the strong awrahness of the thigh?
You may also refer to the fatwa islamqa #45514.
See also: What is the 'awrah between husbands and wives?.
If I found time I might search for some additional information based on commentaries of similar ahadith if I found anymore input.