Um, I think "misty" of the jazz standard is definition #3 in Webster's, but I suppose it could be a matter of interpretation. To me if a person is "misty" it means they tear up; it's also rather poetic, not everyday language.
Definition #2 is used attributively IMO, such as the example from Webster's or "through the misty depths of time", "misty memories of the past", etc.
Edit: 1) OK, after looking at the lyrics more carefully "vague, confused" does make more sense. Man kann weder "nebelhaft", noch "diesig"/"dunstig" noch "unklar"  werden
But LEO does have now "verworren". Wouldn't that work?
2) There still isn't an entry for the "tearful" meaning. Or does "mit verschleiertem Blick" mean tearful?
Yet another edit: http://www.learnersdictionary.com/definition/misty3 informal
▪ misty eyes ▪ I get (all) misty [=I get tears in my eyes; I feel sentimental] when I hear that song.
Webster's Learner's Dictionary gives the song's lyrics as an example and defines it with tears or feeling sentimental.