It can indeed mean very different things... 1) "scrunchie" - ex : La jeune fille a un chouchou rose dans les cheveux. 2) "favorite" (can be derogatory) - ex : Paul est le chouchou de la maîtresse. ex : Une mère n'a pas de chouchou ; elle aime tous ses enfants de la même manière. 3) as a pet name (but it can be a little ridiculous) - ex : Qu'est-ce qui t'arrive mon chouchou ? Pourquoi tu pleures ? Actually, I use "chouchou" sometimes as a pet name to my students (I'm an elementary school teacher) when they do or say something silly. But that's definitely a me thing. It makes them laugh (they absolutely know that it's an endearing term in my mouth).

"Choucou" can also means someone's favorite person. For example you can say : "Paul est le chouchou de la professeure", meaning Paul is the teacher's favorite student. Hope it helped you !