There are two St. Sebastians in this poem: the saint himself, and the city in Spain. It seems like a little more than a coincidence that this name would show up twice in just twenty-five lines, don't you think? One theory is that St. Sebastian has, over time, become adopted by the gay community as a kind of patron saint. And given that Frank O'Hara was gay, he's a fitting figure to call upon in a love poem.
Line 1: San Sebastian would be seen by most as an exotic destination, a place that is naturally fun to visit. Okay, it's not as fun as sipping on a tasty beverage with the one the speaker loves, but it's still a great place to be.
Line 3: This mention of Saint Sebastian is a bit more complicated. Coming so soon on the heels of San Sebastian, the reader can't help but notice this echo in the poem. So it seems like O'Hara is trying to draw our attention here. In this simile, our speaker's beloved looks like a "better happier" version of this saint, who is pretty much always depicted as… well, in bad mood. To be fair, it probably has something to do with all of those arrows sticking out of him. So it doesn't take much to look like a "better happier" version of this guy, but when a gay writer invokes this saint by name, we get the sense the you of the poem is one half of this gay pairing.