haha man that looks spooky. I don't see your wireframe, but I can tell by the edges, the wires are really messed up around that area. You mind showing another screen cap with wireframe on?

if you can fix the edges and give it edge loops that circles the lips, ou can easily cover that up by extruding the edges inside that circle inwards. Then after that, you can add edge loops around the new faces and pull the edges out until you get the shape you want. Unless you plan on bringing it to Zbrush or Mudbox, you don't need to completely cover up the mouth though, you can leave a hole at the end of the mouth tube you create.

If you don't mind, send me the file and I'll play around with it and send it back to you.