Kathleen

"All the other girls here are stars-you are the Northern Lights. They try to shine in through your curtains-you're too close and too bright. They try and they try but everything that they do Is the ghost of a trace of a pale imitation of you. I'll be the one to drive you back home, Kathleen."

He thinks she's beautiful. That part is pretty self-explanatory.

"This party was made with the night air and the chance that a smile Will wind it's way from your face to one of the boys in your line. You act like you're hip to their tricks and you're strong, But a virgin Wurlitzer heart never once had a song. I'll be the one to drive you back home, Kathleen."

"One of the boys in your line" makes me think that she has her eye on one particular guy that's there. She tries to seem "cool"/not innocent (you act like you're hip to their tricks and you're strong), but she's never been in love before (a virgin Wurlitzer heart never once had a song).

"And I'll have you back by break of day, I'm going your way anyway. And if you come along, I'll be yours for a song."

Maybe that one guy wasn't interested in her, even though it seems that all of the other guys there were. She's upset, maybe she's considering going home with some other guy there, and the narrator offers to give her a ride home, both to protect her and to offer some support.

"I know you are waiting and I know that it is not for me, But I'm here and I'm ready and I saved you the passenger seat. I won't be your last dance, just your last good night. Every heart is a package tangled up in knots someone else tied. I'll be the one to drive you back home, Kathleen."

He knows that she's waiting to give her virginity to someone she loves, and the narrator knows that she doesn't love him. Still, he's there to offer support and platonic love (I'm here and I'm ready and I've saved you the passenger seat). They probably go drive around that night, just enjoying each other's company. "I won't be your last dance, just your last goodnight" might mean that he won't be the last guy that she connects with/has fun with, but he might be the last one she says goodnight to (meaning the relationship doesn't continue). I'm not sure, I was a little confused about that line. "Every heart is a package tangled up in knots someone else tied" I think means that everyone is influenced by the people they've loved and the people who have loved them.

"So crawl up your trellis and quietly back into your room, And I'll coast down the length of your drive by the light of the moon. And the next time we meet-a new kind of hello, Both our hearts have a secret only both of us know, 'bout the night that I drove you back home Kathleen."

He takes her home, she sneaks back into her room, and he drives home. "The next time we meet, a new kind of hello" means that things between them will be different the next time they see each other, because they got to know each other better that night. He learned something about her that she didn't tell anybody else (that she's saving herself for someone she loves), which might be what he means by "both our hearts have a secret only both of us know".

I don't know if any of that's right or not, but it's a sweet song. I love Josh Ritter.