"You're the sky that I fell through, and I remember the view whenever I'm holding you. "
I think he's talking about when he was falling for her, he fell so fast as if he were falling through a sky. And because he fell really fast, sometimes he forgets how much he really loves her, but remembers when he holds her.
I don't know what the sun hung from a string means
"Chills run down my spine as our fingers entwine, And your sighs harmonize with mine. Unmistakably, I can still feel your heart beat fast when you dance with me."
Even though they love each other a lot, and it's a serious relationship, he still has that little kid crush on her and it keeps them in love. They think the same, and he enjoys being similar to her.

"We got older and I should’ve known (Do you feel alive?) That I’d feel colder when I walk alone (Oh but you’ll survive)"
They're growing apart as they're getting older/ growing old of each other. and they're losing the spark that made them feel so alive in their relationship. He's saying he should have known from the beginning that this would happen, they couldn't be perfect together forever. They still want to stay together, and are convincing themselves that they'll survive the boredom/ relationship problems.

"So I may as well ditch my dismay. Bombs away, bombs away"
Since he knows that they'll survive the issues in their relationship, he's telling himself he should just forget about the problems and pretend they never happened, and try to go back to normal. "Bombs away," Meaning something like 'alright, I can survive this, lets try again.'

"Circle me and the needle moves gracefully back and forth, If my heart was a compass, you’d be North"
He's saying that she is north on the compass and the stick thing in the compass is called a needle so when she walks around the needle in the compass follows her

"Risk it all 'cause I'll catch you if you fall."
They can risk everything for each other, and trust each other more than anyone because they both know that if something bad happened to the other they'd be there to catch them if anything is wrong.

"Wherever you go, if my heart was a house, you'd be home"
He's saying that a house can just be a house, a house can't just be a home- it has to become one. A home could be many different places. A camp, a friends house. In this case, she's his home. His shelter, his everything- and it doesn't matter where they are. Separate or together, no matter how far away.

"It makes me smile because you said it best, I would clearly feel blessed if the sun rose up from the West"
He's happy because she knows & can describe perfectly how they feel for each other and about everything- I'm guessing that some of the lines in this song are quotes of things she said.

"Flower balm perfume, all my clothes smell like you, ‘cause your favorite shade is navy blue"
The type of perfume she wears rubs off on his clothes (mostly navy blue because that's her favorite shade on him,)

"I walk slowly when I’m on my own (Do you feel alive) Yeah, but frankly I still feel alone (Oh but you’ll survive)"
He's sad and lifeless when he's without her, but just thinking about her makes him feel alive- but still alone.