It's used as a term of romantic affection between couples. Casual friends or strangers wouldn't say it to one another (at least in my country), but for couples in a romantic relationship it's a very natural and common term of affection. Either could say it. I've seen waitresses say it to customers in US tv series "What do you want, honey?". But I never hear it used this way where I live.

of course we do !!!

In the UK honey can be a term of endearment or it can be used romantically. Often it is shortened to "hun", however there are some people who may not like it used to them as a term of endearment.