How do I specify an IPv6 address in the X Window DISPLAY variable?

Put square brackets around the IPv6 address.

$ DISPLAY=[::1]:0

X(7) man page - "DISPLAY NAMES"

The hostname part of the display name should be the server machine's hostname or IP address. Full Internet names, abbreviated names, IPv4 addresses, and IPv6 addresses are all allowed. For example: x.org:0, expo:0, [::1]:0, 198.112.45.11:0, bigmachine:1, and hydra:0.1.