Real buffalo gals are a bit shy; it would be very hard to get them to come out and dance by the light of the moon.
Several of the books I skimmed on Google Books indicated that this song was sung as a line of dancing girls was brought out (something akin to the Rockettes, as I understand the description), part of a minstrel show. That might make slightly more sense, but I still think the song has some connection to prostitution.