Stephin Merritt has often said that he writes songs about songs (see Stephin Merritt Quotes), and this appears to be — at least in part — a literal instance.
LD Beghtol writes:
We recorded this the same afternoon we did Nothing Matters When We're Dancing so my voice was pleasantly transparent and 1930s tenor-y — a voice I don't often get to use. We did three takes for this, one for each verse and once for the coda. It was pretty high already, then when Stephin mixed it he sped it up perhaps a whole step, to really thin out my voice and make it mechanical sounding. It took me a while to get used to that!
There is a song I Love The Way You Say Good Night that appears in the Doris Day film [Lullaby of Broadway] (coincidentally, Lullaby of Broadway is also the title of a song written for the Busby Berkeley film Gold Diggers Of 1935, where its performance features 100 dancers).
However, the lyrics refer not just to the song "The Way You Say Good-Night", but also to the way the singer's lover says good night: 'The way you say good-night / I dream of all day long', leading to the reflexive twist, 'Oh, I could write a song about the way you say good-night... ' Stephin Merritt points out in the 69 Love Songs booklet that the way the person says good-night is never described in any way. In the terms of Ferdinand de Saussure, "The Way You Say Good-Night" is a signifier, but the signified remains unknown.
'The stars begin their Busby Berkeley dance'
For Busby Berkeley, see Busby Berkeley Dreams.