2 With goodly purposes, there as they sit:
goodly > (Ironic) fine, elevated; courteous purposes > intentions
3 And in his falsed fancy he her takes
falsed > corrupted; failing
4 To be the fairest wight that lived yet;
wight > person, woman
5 Which to express, he bends his gentle wit,
bends > turns, applies; perverts from its usual trend; also, from Old English: puts in bonds; hence: constrains, confines
6 And, thinking of those branches green to frame 7 A garland for her dainty forehead fit,
dainty > {Delightful; of delicate beauty}