The simple meaning of the verse, as the Mechilta says, is that the Machaneh of the Egyptians did not come close (to attack) the Machaneh of Klal Yisrael. The Gemara expounds the verse to mean that the angels did not approach each other the entire night ("Lo Karav Zeh El Zeh") in order to say Shirah, since the verse elsewhere (Yeshayah 5:3) describes the angels when they say Shirah as approaching and calling "one to the other" ("v'Kara Zeh El Zeh...").

Chag Samei'ach,

Y. Shaw