Recently I've been reading entries in Mark Lewisohn's The Complete Beatles Recording Sessions about songs that ended up on the Yellow Submarine album ("All Together Now" and "It's All Too Much" in particular). This morning I listened to the album and noticed a handful of things.
In "Yellow Submarine," more voices join in for the choruses. There's a harmony part, and I'm pretty sure the lead vocal is also supplemented by additional voices (it certainly is when the chorus is repeated at the end). These additional voices provide a musical example of the "all" in "We all live in a yellow submarine."