1. In a way, it's up to you to imagine what's going on that's in keeping with the rest of the lyric. Maybe he's talking to her on the phone, maybe he's wondering if he should call her, maybe he's wishing she would call him, maybe they've just finished talking, maybe it just makes him feel closer to her... whatever. Perhaps the word "alone" and the later line "what would you say
if I called on you now" suggest that he isn't actually talking to her, but this analysis may be more than the lyric will bear. Often pop song lyrics are just any old thing that rhymes... "phone", "alone", yeah, that'll do...
2. It's not likely to literally mean his head (though there could be a hint of an intentional double meaning I suppose). Primarily, "it" is a dummy pronoun (I hope that's the right term) which doesn't actually refer to anything but is needed for grammatical purposes -- as in "it's raining", "it's not looking good" etc.