muscly/muscley is commonly used in informal or casual UK English. If some person is brawny or has bulging well-developed muscles, you can either call them 'muscly' or 'muscular'. In this instance, the 2 words are synonyms. But 'muscly' is only used this way - its usage is far more narrow than 'muscular'. 'muscular' has a broader meaning and can be used in several ways: "He suffers from the disease muscular dystrophy" "Tigers have much more muscular strength than cats". In these two examples, I cannot use 'muscly' instead of 'muscular' So for describing someone with well developed muscles, you can call them 'muscly' or 'muscular'. In other cases, you need to use 'muscular'.

"Muscular" would be the proper way to describe someone with defined muscles. "Muscle-y" isn't really a word and it's only ever used very casually/informally by people that, for some reason, haven't chosen to use the word, "muscular."