Being in love.

This song is very...normal sounding, I guess, for Neutral Milk Hotel. It's one of very few of their songs that doesn't seem to have that real, honest soul that is so uniquly NMH. Hmmm.

"Life's not horrible all the time," however, is intensely true and perfect.

Yes, it's about love, and I suppose it's more normal sounding than some NMH songs, but I wouldn't say it's lacking any real, honest soul. There's a lot of subtlety to the lines. "I hold it into an arm so real/There is something we could feel." That seems to be more of a drug reference to me than one of love.
"Smokes and cups and words that rhyme/Dripping ceiling, lemon-lime": This line seems to give to give a similar unworldly or unnatural depiction that one would get on drugs with "Dripping ceiling." I'm still not sure what to make of all this though: "Eyes of gray and pavement green/Wrap your arms around the seam/Take your love and hold it close/The slightest suggestion". Anywho, my two cents