As an ode to artistic expression, the song's lyrics are clearly a tribute to the artists who inspired Scott. While there has been much speculation about who it is written about, the only comments that Scott has made indicate that C.S. Lewis was "in there somewhere" and that Prince wasn't (Prince had been rumored to be a source of inspiration, and some sources still cite him).
Amazingly, neither "The Whole of the Moon" single nor the This is the Sea album ever charted in the U.S. "The Whole of the Moon" did chart twice in the U.K.; once in 1985, upon the original release (#26), and again in 1991 (peaking at #3), after the song won an Ivor Novello Award for Best Song Musically and Lyrically.
After This is the Sea, Scott (who was the main creative force behind the Waterboys), opted to go for a smaller, more folk sound, which continued until the band broke up in 1993.
Cool trivia fact: The video is directed by Irish director Meiert Avis, who has directed dozens of videos, including a bunch from U2. The Waterboys posed a little bit of a challenge in that Mike Scott will not lip sync; hence an actual concert was created just for the video.