Cuddling is showing your affection by touching: hugging someone tenderly, snuggling, caressing and embracing. It can be a prelude to sex, but not necessarily.
Cuddling is about tenderness, intimacy and belonging, while sex is about passion and sexual excitement.
Everyone needs to be held close for warmth or comfort. It gives a sense of being loved. When you are still small you are often touched, kissed and hugged you automatically by family members. But when you get older this normally happens less frequently.
When in your teens you start dating physical contact often has a sexual connotation. A touch is automatically linked to sex. As you get older it becomes easier again to touch and be touched apart from sex, just to express affection.
A relationship is more satisfying if there is place for both - sex and cuddling - and cuddling does not have to lead to sex.