“Ew! Don't pick your nose! That's gross!”

You're babysitting someone's young child. The child puts his finger in his nose. You want to scold him and tell him not to do that. You say:

Ew! Don't pick your nose! That's gross!

Ew!

Make this sound when you see, smell, or hear about something disgusting. 

Another similar interjection is "Yuck!"

pick (one's) nose

"Picking your nose" means putting your finger in your nose to pull out boogers. Boogers are the greenish-gray, solid substance which builds up inside your nose.

Picking your nose is not acceptable in American culture.

(something) is gross

The word "gross" means "disgusting". Here are some examples of things that are "gross":

A rotting egg that's been left in the refrigerator for too long.

An older, married man who makes sexual comments about younger women.

A close-up photograph of a surgical operation.

The word "gross" is more casual and weaker in degree than "disgusting".