St. Augustine says this is to be understood of our Lord Jesus Christ. If this is to be understood of our Lord Jesus Christ, then it must also be understood of the Catholic Church because the Catholic Church is the the Body of Christ. If this is to be understood of the Catholic Church, then it must also be understood of each of us due to our being members of the Body.
The question comes to mind: Why does not the psalmist begin with "blessed is the man who walks, delighting in the law of the LORD"? Why does he begin with "blessed is the man who walks not in the counsel of the wicked..."? It very well may be: because this is what comes natural to fallen humanity. Although our Lord was without sin, He was tempted in every way as we are. He was tempted; however, He rejected the temptations because of His love for the Father and for His fellow man, His neighbor. Although the counsel of the world may seem plausible, perhaps even good, we must pause and consider what Christ says through His Church. If we disagree with the Church and walk in agreement with the world, we are detesting the law of the Lord and are walking in the counsel of the wicked.
Notice the graduation: First he walks; then he stands--standing firm; and then he sits--at rest, on a throne, making himself a god, scoffing at those who disagree with him. He sits as a judge, putting himself over others.
Now, the blessed man--because he desires to be the image of his Head, Jesus Christ--delights in the law of the Lord, meditating upon it day and night. He is not under the law, being burdened down with rules he cannot obey, because the law is in him and he in the law. Jesus is the fulfillment of the law; we are in Him, and He in us. We are a new creation, delighting ourselves in Him, desiring to be as He is. For this reason, we are not standing--so that we can be knocked down--but we are planted, rooted in God Himself. For this reason, we--a unity, the Catholic Church, with Jesus as its Head--yields fruit in its season, and its leaf does not wither; in all the unified Catholic Church does, he prospers. We are Catholics unified, strong, walking in unity, as a Body. We walk in agreement with the Head. Scoffers are individuals, divided; we are ONE. Because the world is divided, each doing what is right in his own eyes, the world must perish. Their way must perish. A house divided cannot stand.
Why do we delight in the law of the Lord? Why do we delight in being an image of Jesus? Because He delighted Himself in us. "When Jesus saw his mother, and the disciple whom he loved standing near, he said to his mother, 'Woman, behold, your son!' Then he said to the disciple, 'Behold, your mother!' And from that hour the disciple took her to his own home." Perhaps, St. John did not use his own name for the reason that we should put our names before the words "the disciple whom he loved." When we take our Blessed Mother into our lives, we are also taking the Catholic Church into our lives, living its doctrines and dogmas.