The film (a favourite of mine, though it does have its failings as pointed out above) has been discussed here before. See the late Bruce Olson's comments here and on his (archived) website for decent information on the song in its varioua permutations. He devoted some time to it, and the Traditional Ballad Index would do well to take more of his conclusions on board.

"Dee" is certainly not "a form of Sidhe". It's "dear" to the ear, and more likely to be "deil" (devil) if we must look for something exotic.