"Cheesy" means when something is made to win at all cost, has too many upgrades, and doesn't fit with the spirit of the game or the intention of the game designers. For example a cheesy dark eldar HQ would be an archon with agoniser, splinter pistol, drugs, shadow field, hell mask, talismans, grenades, on a raider with a disintegrator and 9 incubi retinue. If an eldar player has 3 wraithlords in his army, or a space marine player has 3 whirlwinds, that is considered cheesy by most people.
"Fluff" is the story behind the game - information and background with no rules. When a player does something that does not fit with the fluff, it is often considered cheesy!