Nader is correct - "huggable" is definitely NOT standard English, but it would mean that someone is very cute and makes people want to hug them! It would be fine to use the word in a joke or in very informal English, but would look unusual in formal writing.

I looked up the word in my dictionary and It didn't come up with anything, but what I figured out is; if somebody tells someone else they are huggable, that means they wanted to hug them, or maybe..