I have come across it in the 18th episode of the 6th season of Friends. Here is the context:
Chandler: (To Joey) So, you busy Thursday?
Joey: Oh, very funny. I don’t know if you remember, but my audition was supposed to be Thursday. (Chandler doesn’t say anything until Joey figures it out.) You got me the audition?! Let’s hug it up! (They hug.)
Does it mean let's hug a lot?