The more it is looked at, "Beautiful Isle O'er the Sea" just seems to be verses from several songs collected under a title. There is no relation to the Cooper-Thomas song of 1865 except the title. In other words, a "maudlin effusion"* or mishmash of the Prisoner's Song with various floated verses (*So designated by Belden).
The "Seven Long Years" in Gardner is no better, and the chorus "Beautiful Light of the Ocean" doesn't belong with the text.

To me, 'beautiful light' makes sense, since the visual artists I have contect with are always talking about it.

In reference to faith- R. Turnbull, "Beautiful light is born of darkness..."
Ajax, about to die, salutes the car of the sweet sun, the "Beautiful Light"
Langston Hughes- "In front of me, big shadow/ Inside the shadow, beautiful light"
etc.
Perhaps there was another poem or song, 'Beautiful Light O'er the Sea/Ocean', that inspired folk singers to add it to their 'effusions'.