The area of a trapezoid with height $h$ and base lengths $b_1$ and $b_2$ is given by
$$ \frac{b_1 + b_2}{2} h.$$
I like to think of this as saying that the area of a trapezoid is the same as the area of the rectangle with the same height and average width of the trapezoid.
It seems to me that a frustum is the 3D analog of a trapezoid. If we reason analogously to the trapezoid, we might expect the volume of a frustum with height $h$ and base areas $A_1$ and $A_2$ to be
$$\frac{A_1 + A_2}{2} h,$$
which is the volume of a prism with the same height and average base area. But that's not what we get; instead, we get
$$\frac{A_1 + A_2 + \sqrt{A_1A_2}}{3} h,$$
which we can derive by extrapolating the frustum to a pyramid and removing the part outside the frustum.
My question is: is there any intuitive interpretation for this extra $\sqrt{A_1A_2}$ term? What does it represent?

While the cross-section varies linearly in the trapezoid, the cross-section of a frustum varies quadratically. Consider $A=ay^2$, the average function value on the interval $[y_1,y_2]$ is $\frac{a\times (y_2^3-y_1^3)}{3(y_2-y_1)}=\frac{a(y_2^2+y_1^2+y_2y_1)}{3}$. Let $a=\pi$ and $y=r$ for example. $$A_\text{avg}=\frac{\pi(r_2^2+r_1^2+r_2r_1)}{3}$$
Per your formula, $r_1=\frac{\sqrt{A_1}}{\sqrt {\pi}}$ and $r_2=\frac{\sqrt{A_2}}{\sqrt {\pi}}$, or, generally, $r_1=\frac{\sqrt{A_1}}{\sqrt {a}}$ and $r_2=\frac{\sqrt{A_2}}{\sqrt {a}}$