I can't imagine what else they could be, it would make sense to talk of popular and charming tourist towns to your children while they dream. My mother used to play a game with me and my brother when we were younger because we didn't have enough money to travel anywhere. At dinner she used to pretend we were on a flight somewhere and dinner would be the on flight meal. I kind of think of this idea as something similar. The children are visiting these seemingly magical and dream-like places as they go to sleep.

I don't think there are other places in Ireland that would be referred to, unless the song is so old the lyrics were written before the towns were created. I can't imagine this being possible.

Of course there's no documented evidence, but It at least seems like the most logical scenario. I found a version of the song on itunes by Carol Ashton, she's very clear and the names are correct.