"I talked to my old granddad, as he fell into the sea."

Cabbagetown is a suburb of Toronto, Ontario, Canada. Toronto doesn't border on the sea, though, so this leaves several possibilities:
1. The narrator mistook Lake Ontario for the sea.
2. The song takes place in the same alternate dimension in which there is a coast of Arkansas.
3. The song is about a different (probably fictional) Cabbagetown.