The title is oh-so-creepily inviting. It combines, in the spirit of horror and Gothic conventions – love, life, death, and beauty. It also provides us with suspense and mystery – we want to know whose bones these, are and why they might be seen as lovely.
Let's try out Mr. Harvey's perspective. He doesn't keep the bones of his human victims (though he'd probably like too). Nope, his bone collection comes from the neighborhood pets, whose disappearances are at first blamed on the unfortunate Joe Ellis. Susie tells us, "What I think was hardest for me to realize was that he had tried each time to stop himself. He had killed animals, lesser lives, to keep from killing a child" (11.21). Fans of Twilight and Anne Rice's vampire tales will recognize that tune. In any case, the animal bones are (possibly) lovely because they represent moments when Harvey resists his desires to rape, brutalize, and murder people.
At first, all we can think about is the elbow – the only bone of Susie's that is found. It gives the people who love her proof positive that something horrible has happened to her, but it also gives them hope at first. If the other bones aren't found, it's possible that Susie might still be alive even though she might not have an arm anymore. Of course, this hope is bitterly dashed. Her bones are lovely to her loved ones not in hope, but in their memories of her.
Late in the novel, when her family is celebrating together, Susie reveals what the title means to her:
These were the lovely bones that had grown around my absence [...]. And I began to see things in a way that let me hold the world without me in it. (23.97)
This is some pretty abstract talk, what we might expect from a ghost, but we can follow. Susie is saying that a) she sees her loved ones and their stories as the bones of a body of earthly happiness, of life; and b) she can stop anxiously hovering over them, because they are OK.
But, the sentence that follows the above complicates matters. Susie says,
The events that my death wrought were merely the bones of a body that would become whole at some unpredictable time in the future. (23.97)
We've thought about this a lot, even had a few meetings about it, and have come to the conclusion that Susie is waiting for the day when her loved ones are all dead with her; then the "body" will be "whole." Sounds morbid, but that's natural for the dead. We think it's a good thing. In Susie's expanding understanding of the world, human life is really short and is followed by a seemingly eternal afterlife. So, death is no longer something to be feared; it's the bulk of existence.
Yet, no amount of philosophical high-roading can stop Susie from wanting herself and her loved ones in the same place. Hence, her wishes for their deaths, as well as for their happy lives. She knows she can't go back to them, so they have to come to her.