Tradsinger, I don't think one can read homosexuality into The Handsome Cabin Boy.

The captain's wife (along with the listener) has observed that:
a: The "cabin boy" has become pregnant and had a baby
b: All members of the crew have denied responsibility
c: There's only the captain and herself left to look to.

Her comment that "It's either you or me has betrayed the handsome cabin boy" is ironically expressed. Since the wife could not have impregnated the "cabin boy", it must be the captain to blame. In effect, "It's down to us, and I couldn't have. Where does that leave you, my dear?"

Of course earlier in the song the wife had looked at the "cabin boy" and "she would have liked to toy", but that was under the impression that this was indeed a real young man, so no homosexual content is there.

Dave Oesterreich