One way to interpret it is that the singer wants affection from this person, so he's desperately looking for signs of it ("don't you know you're sleeping in a spotlight.") But these assurances ("you tell me that need me, you tell me that you love me") are actually coming from a sleeping person, who could simply be dreaming about someone else---not necessarily the singer!----but this is so eager to believe the affection is for him (which probably isn't the case if he all he has as proof are sleepy mutterings!). Overall it feels like a lonely, pathetic, desperate, obsessive song-----the object of affection is distant, removed, asleep to him, but he's consumed by observing her, looking for any sign or word of affection, to the point of deluding himself into believing what he wants to be true----so in a way, he's asleep himself.
One way to interpret it is that the singer wants affection from this person, so he's desperately looking for signs of it ("don't you know you're sleeping in a spotlight.") But these assurances ("you tell me that need me, you tell me that you love me") are actually coming from a sleeping person, who could simply be dreaming about someone else---not necessarily the singer!----but this is so eager to believe the affection is for him (which probably isn't the case if he all he has as proof are sleepy mutterings!). Overall it feels like a lonely, pathetic, desperate, obsessive song-----the object of affection is distant, removed, asleep to him, but he's consumed by observing her, looking for any sign or word of affection, to the point of deluding himself into believing what he wants to be true----so in a way, he's asleep himself.