In fact petite mort, can also mean orgasm in french.

Knowing this, we could translate the lyrics like this :

Si l’on me perd

It can be a reference to what the doctors say when a patient is on the verge of dying (we’re losing her), but here it’s not death, but pleasure : If i’m losing myself on pleasure / ecstasy / orgasm

Sache que je serai la tienne

Know that i’ll be yours (implicitly forever)

Et au creux de ses bras la mort nous emportera

Refering to the great pleasure during the orgasm : And during the orgasm, we’ll be lost in pleasure.

(sorry, i can’t really translate all the subtleties of the lyrics).

In this case, “on” refers to a very general idea, barely referring to “people in general” or “the world”. I think a good translation rule in English would be to use passive form :

Si l’on me perd

If I get lost

or

If the world looses me (yet, no narcissistic intention here)

Maybe another example that would be clearer :

Si l’on me ment

If I get lied to

or

If people lie to me

Nowadays we could see it as a poetic or theatrical usage, but back then it was a common way of talking, which is now outdated in everyday language (or at least in France, from what I know).
I don’t know this song, but by seeing such expression I would say it is either quite old or the songwriter wants to use a certain expression style.

On does not mean “you”, but sometimes (and I think not in this case, see Rémi Henry’s answer) it can be translated into English as “you”. But this is to do with English, not French.

It appears that in Proto-Indo-European, verbs had forms, almost containing an r, to make the passive voice:

Perdor

This r gives a clue to the origin, as lots of words for people, in lots of languages, contain an r, e.g. mère, docteur. So if r means “person” or “one”/”on” then perdor means

“A person loses me” or “one loses” me

and this becomes the passive.

But modern languages have lost this synthetic (one word) passive, so we use various circumlocutions such as

On me perd
Je me perds
Je suis perdu
I am lost
I have been lost
One loses/is losing me
You lose me
etc.

None of these is an exact translation of “perdor”, so when translating from French to English one has to/you have to (just to demonstrate how we often use “you” instead of “one”) use your judgment as to which is best. Further, it is not always easy to tell if it is a genuine passive sense. For example, “je me perds” could just mean “I lose myself” and “you lose me” could just mean “vous me perdez”.