Somewhere I learned that bows are the bits of land caught up in the meanders of a river. So a river is involved in a song about the bows of London. I believe that "gay and grinding" refers to the river, which can be gay with flowers on the banks, butterflies in the bows and colorful ducks. "Grinding" refers to the work the river does in turning mills.

If you go to Google Earth and search for London England UK, you can follow the Thames east to the sea. There are two lovely meanders in the vicinity of Rotherhithe and Millwall. There may have been others which have since been cut through to aid navigation.

News flash! a hithe is a small port. (I just looked it up.)

That song, which I learned off one of Martin Carthy's recordings, is one of my favorites.