The idea of tying a ribbon around a tree to welcome home a prodigal son figure is the central motif of a short story “Somebody’s Son,” by Richard Pindell, first published in American Girl magazine in 1966.
In it, a boy who left home to roam around the country working various odd jobs is hitchhiking home, wondering if he will be allowed to return. When he left, his father had told him not to bother ever coming back (because he was going against his father’s desire for him to go to college). On the final leg of his return trip, he’s on a train, and recalls a letter he had sent to his mother asking her to tie a white cloth to an apple tree on their property that he would see from the train. When the moment of truth arrives, he can’t bear the suspense, so he asks another passenger to look for him, and the passenger says, “Son, I see a white cloth tied on almost every twig.”
I haven’t done any research to see if there’s a definite connection between this story and the Tony Orlando song, but the resemblance is quite strong, so I doubt it’s coincidental.