Some people get lucky enough to have their characters' sexual identity explicitly addressed in canon. I am not one of them. So I've been extrapolating from what little bits I do have, and trying to come to a conclusion that's plausible and also fun to play. Rambling attempt to explain myself follows.
The biggest single flaw in my canon, in my opinion, is how flat and stereotypical its approach to gender is. (There are other flaws, sure, but for me this is the big one.) Background NPCs do okay; there are both men and women in all the nations' armies, and the ridiculous dumb stuff that townspeople ask for in sidequests doesn't seem to have a lot to do with gender (apart from that one creepy old man with his roofies). But anyone who's in focus enough to have a name had better be doing his/her plumbing "right." The women of the party are almost entirely defined through their sexual relationships (or potential relationships) to the men, with the exception of Amazon-type Dominica, who is defined through her role of protecting the princess, and who's generally the exception to the rule -- except when she's trying to convince the trans boy in the party that he should be okay with being female. :/
The men of the party are defined less through their sexual relationships -- isn't that always the way? -- but there's still material to work with. Sigmund, who is the epitome of heroic masculinity that the rest of the characters (the rest of the world) admire at the game's start, accepts Michelle's devotion as if it's his due; he returns her embrace but doesn't seek her out, smiles when she declares her love but doesn't answer it. Capell, who ultimately is the center of all the romantic threads of the story (one of his traits, that evolves over the course of the game, relates his developing taste in women), is eagerly and enthusiastically interested in any woman who offers. Possibly in order to make room for him to have options, most of the other men in the party are made "unsuitable" in one way or another -- Kristopher's a sleazebag; Touma's oblivious (and his ninja is glued to his side); Balbagan is considerably older, and a widower, taking on a surrogate-father role for the party children; Kiriya is contemptuous and misanthropic; etc.
So, Edward. Edward is ideally placed to be Capell's rival (taller and stronger, handsome, the same age, also fairly new to the party), and in other ways he is; there's a lot of tension between them, but none of it involves women. Rather, it centers around Sigmund. In the first disc, Edward idolizes Sigmund and wants his attention and respect; in the second, he wants to honor Sigmund's memory and carry out his quest. He's phenomenally jealous of Capell's ability to do these things (as Dominica points out explicitly), and doesn't understand why Capell is worthy when he isn't. His character crisis in the second disc brings those issues to the surface, and it's resolved when Capell acknowledges Edward's need to grieve for Sigmund, and Edward acknowledges the ways that Capell and Sigmund are similar -- after which Edward bonds with Capell without reservation, up to and including discarding a prejudice he's held all his life because Capell's worthiness proves it wrong.
So. All the important things that happen to Edward over the course of the game are about his relationships with other men. His relationships with women...are nonexistent. He is impatient and curt with Aya (despite displaying, in general, respectful attitudes toward nobility), and angry when Michelle shows up to fawn over Sigmund. He takes it well when Dominica teases him, but that's about it.* There's a private event in Fayel where Michelle teases Capell about taking her clothes off, and he gets flustered by it; you can bring Edward along for this, and if you do, his response is "Why should I care what you're wearing?" When he's reading in the Halgita library, Capell asks if the book is a dating guide, and Edward wants to know why he would read such a book. None of the other characters, at any point that we've been able to discover, even suggest that he might be interested in any of the girls we run across over the course of the story. Even in the epilogue, it's Eugene who's fending off marriage proposals from strange women, not Edward.
And all of that could just be intended to read "he's too serious to let himself be distracted by sex when there is a mission to complete." It's possible! But it's not terribly interesting to play -- especially now that he's in camp, where there no longer is a mission to complete. With that pressure off, he's free to start thinking about how much he'd like to get laid (which I'm pretty sure he never has; he spent his 16-turning-17 year traveling with Sigmund, and before that he was too angry and aggressive after the deaths of his parents to be an appealing prospect). And it's already clear that he's formed his strongest emotional attachments to attractive young men. So when Stiaan told him that those emotional relationships could be physical relationships as well...it was a little like opening a floodgate, really. Suddenly all the irritation and dissatisfaction with his options was gone -- it turns out he could have something else entirely, and that something else is wonderful.
*I really think there are two kinds of women in Edward's mind: the ones who don't make sense, and warriors. I am hoping camp will shake him out of this. We'll see.