Cwtch is a named town in Llamedos. it appears on the full Disc map given in The Compleat Discworld Atlas. It is located on the valley of the river Llwk-Yu(refer to note on spelling) and is Hubwards of Pant-y-Girdl.
cwtch, pronounced "cootch", is one of those Welsh words and is generally interpreted to mean a loving hug, a kiss, a cuddle, a display of affection. In some uses (ask the military) it can also mean full-blooded sexual activity. Context is everything.