"Sandy" was a composite of girls Springsteen knew growing up in New Jersey. He calls the song "a goodbye to my adopted hometown and the life I'd lived there before I recorded."
Asbury Park is a resort town in New Jersey that has gradually deteriorated. The summer romance and the images on the boardwalk struck a chord with just about anyone who grew up in New Jersey. The town provided the name for Springsteen's first album, Greetings From Asbury Park, N.J.
This evolved out of two songs that did not make Springsteen's first album: "Casper" and "Glory Road."
E Street Band member Danny Federici played the accordion.
Springsteen whispered his vocal to create a sense of intimacy.
Regarding the lyrics, "Did you hear the cops finally busted Madam Marie for tellin' fortunes better than they do," Madam Marie was a real fortune teller on the boardwalk in Asbury Park. According to the Asbury Park Press, she was never arrested, but she was a fixture on the boardwalk. Legend has it that when Springsteen saw her, she told him he would be a success, and that Springsteen joked that she said that to all musicians. Madam Marie died on June 27, 2008 at age 93.
The choir is really one female singer with lots of overdubs. Springsteen wanted to use a children's choir, but ended up using Suki Lahav. She played with the band from September 1974 - March 1975, but was not credited on the album.
Springsteen is not from Asbury Park. He was born in Long Branch, New Jersey and raised in Freehold. Asbury Park is his "adopted" hometown, where he hung out and played.
The version included on the box set Live 1975-1985 has some extra lyrics in the third verse.
The Hollies covered this in 1975 with its title shortened to "Sandy." It was the first song written by Springsteen to chart, hitting #85 in the US.