It depends on the context, but generally speaking, cupcaking is a term that means he's smitten to the point of going out of his way for a woman. A guy who's cupcaking (or "caking") as we generally call it, is the dude who will stop a convo with his boys to take a call from his girl. Or who will leave the festivities early to go hang out with his girlfriend who called and said, "hey I want to watch The Notebook"....and he goes willingly.
Cupcaking is just another way of saying being whipped.
Ahh ha errm cough cough, one of my ex's used to fart in his hand and then release it in my face and say "have a cupcake" eww, he thought it was reallly funnny. And HE broke up with ME, I was so young and stupid, but learnt my lesson there.
If a guy is referring to a girl and says "she's cupcaking it" he means that she her jeans are so tight that they push tummy fat out and it puffs up or hangs over her jeans like the shape of a cupcake. Not usually a term of endearment.
that's called a "muffin top", technically...