A hug is when you put your arms out, move closer to someone, and wrap your arms around them. Usually you squeeze for a second, then release. It is brief, and it is usually reciprocal (meaning you both hug each other at the same time, and you reciprocate the affection. You both give and both receive.). A cuddle is something more intimate. It is often done by a mother to a child. To cuddle someone is to wrap them in your arms, but they don't have to do anything but accept the affection. Usually cuddling lasts longer. If you cuddle your baby (or your dog, etc), you put him on your lap and pet him and stroke him and envelop him in your arms, you kiss his head, and maybe you rock back and forth and say soothing things. You give affection to him, but he does not have to reciprocate. Lovers can cuddle each other, too, it's not only parent/child or owner/pet. Cuddling indicated devotion. You would hug your uncle when you see him at the holidays. But you would not cuddle him.

Both mean the same thing although a cuddle lasts longer than a hug.