Wow.
I keep coming back to this thread and the richness of the responses to this song is inspiring. It's really what draws you to this music.

That said, I've sung this song many times and always with the recollection of someone once telling me that the song was written by a member of the Dubliners who worked a day job as a teacher and found himself tempted by the young girls at the school. The song was his expression of their untouchable status. Just as the "creature made of clay" is untouchable to the angel. Severe penalty the result of transgression: mortality for the angel, dishonor and prison for the teacher.
Not exactly high minded intellectual analysis, but I couldn't help telling the story.