Yes, I can't see the 'modernness' of 'modern love' referring to sexual orientation, since I'm sure Bowie would have considered orientations to be ancient; rather, it refers to new sexual practices (… of the '60s and '70s).
In reply to:
Bowie at 36 suddenly wanted to make a shitload of money, to be a celebrity, to be well accepted by the mainstream. Something about the way he'd done things for the previous five years - years we fans consider a creative zenith for him - dissatisfied him.
I've always read the song's opening lines—'[Knowing] when to stay in, get things done'—as a declaration of a new work ethic, one which involved adapting his creative resources/persona into a new direction for the '80s.