Guest, your translation is fairly correct, apart from a few things:
"Ich hab dich lieb" means "I am in love with you"
"Feld" is a play on the different meanings of the word in German: in the first verse it means just that, in the second and third it is a euphemism for war: "We went to war" and "We came back from the war".
In verse two I'd prefer "Then the whole world was red with blood", and in the last line I'd use "beautifully" instead of "brightly".
In verse three the idea behind "returned" is clear, I think: "returned from the brink of death" - but this isn't spelled out.
Instead of "good fortune" I'd use "happiness" because I think it refers to the couple's happiness at being together again.
In the last verse it should be "Marie-Morei, bid me goodnight".
I can't shed any light on the connection with the traditional rhyme, though.