Just saw this--I've always considered this a brilliant conclusion to one of PW's great songs.
I agree with FreeRider.
I would add that to be a button is "between being everything / to everyone / and being nothing to no one." That is , the button isn't everything, and yet it's not quite nothing either.
And "the world" evoked by the button is a world of domesticity, the ordinary, the private, little obligations, not very significant.
So the button's world is not the world of "being everything to everyone," that is, a famous person, a genius, a "star," a part of everyone's life.
Nor is being a button to sew on nothing, though it may seem like next to nothing.
I see the song as a muted acceptance of life as it really is, not some fantasy of being everything to everyone. So it rejects the "all or nothing" view of life, that is, either my life is vastly significant or it's not worth living at all.
Yet the button is a fairly petty detail to identify your life with. It's just small enough to express sadness as well as acceptance.