Pretty much what was stated above, the Nuzzle is there so you can send a Nuzzle to someone if you appreciate or like what they have done. It's a little bit like a praise. It's nice to see every time you check up on it I suppose, as you know people are interested in/like what you do. Every time you Nuzzle someone, it adds a 'point' or 'floof' to the Floof-O-Meter. If you see and like what someone posts (whether it being; helpful replies, tutorials, screenshots, art, contest/event entries etc...), then the Nuzzle is a great way to show praise to them. It's a good alternative to commenting/replying to something you may like as well.
It's just a nice little feature of praise. *Sends a nuzzle your way*.
