Well, first of all, it's important to note that 'cock stories' are not something that should be part of a normal or healthy relationship conversation. You could tell your wife that this kind of talk is not acceptable in your relationship. Then, try to find out if there's a deeper reason behind her request, like if she's heard something strange lately or if she's just joking in a very wrong way. Explain to her that you want to focus on positive and respectful communication.
Politely decline and shift the conversation to something else. For instance, start talking about the latest family gathering or a new recipe you've tried. Say 'Aunt, let's not talk about that. I want to tell you about this great meal I had.'
Most mainstream movies avoid such explicit and disturbing content. The movie industry generally adheres to certain moral and ethical standards, and such a plot would be considered inappropriate and offensive for a wide audience. However, in some very low - budget or underground movies that are not subject to the usual regulations, there might be some extremely rare and inappropriate depictions, but these are not the norm.
Such stories often involve very disturbing and unethical content. However, in a civilized and legal society, prisons are supposed to be places of rehabilitation and protection of rights. While there may be individual untrue rumors or fictional accounts, the vast majority of prisons have strict regulations to prevent any form of sexual abuse.