When I call my mates or my man cute, I compliment their personalities. Cute doesn't necessarily have to describe someones looks. I find my man sexually attractive, hot, masculine (whatever/etcetera), but he's still the most adorable and cute person I know.
However... When I call a puppy cute, it's also because of how it looks. It's fluffy, squishy and I wanna hug it. That's how I see someone's personality when I call them cute. If that makes sense?