Bash doesn't create all files and directories with loop

There are a few problems:

1. You aren't iterating over the contents of the array, only the first element.
2. You are executing cd .. too soon; you want to do that after the loop that creates each file.

for folder in "${folders[@]}"; do
  mkdir -p "$folder" &&
  cd "$folder" &&
  for file in "${files[@]}"; do
    touch "$file"
  done && 
  cd ..
done

There are two ways to simplify this. If you keep the cd command, you only need one call to touch:

for folder in "${folders[@]}"; do
  mkdir -p "$folder" && cd "$folder" && touch "${files[@]}" && cd ..
done

Or you can get rid of the cd command, and pass a longer path to touch:

for folder in "${folders[@]}"; do
  mkdir -p "$folder" &&
  for file in "${files[@]}"; do
    touch "$folder/$file"
  done
done

or even

for folder in "${folders[@]}"; do
  mkdir -p "$folder" &&
  touch "${files[@]/#/$folder/}"
done

If you want to get fancy, you can do all of this with zero loops and a combination of bash brace and array expansions:

#!/bin/bash

createapp() {
    local folders=('graphql' 'migrations' 'models' 'tests')
    local files=('__init__.py' 'admin.py' 'apps.py' 'views.py')

    IFS=,
    eval mkdir -p "{${folders[*]}}"
    eval touch "{${folders[*]}}/{${files[*]}}"
}

Note that the use of eval can be dangerous, but it's pretty limited in this implementation as the two arrays are local and not using user-defined input. If this was zsh, you could embed brace and array expansion without the need for eval