At its most basic level, "Lullaby" is a love poem. The speaker begins by addressing his sleeping loved one, and goes on to ponder how love works in a world where everything eventually ends and where no one or nothing is perfect. Even though the speaker seems a bit negative at times (he knows full well that both he and his beloved are flawed), the poem ultimately affirms the value of love. In fact, for the speaker, imperfection is what makes his lover "entirely beautiful."
"Lullaby" is about the conflicts that come from being gay in an intolerant society.
"Lullaby" has nothing to do with homosexuality. No one is perfect, gay or straight.