And there I thought Muggle was just supposed to be a derogatory slang work of the same provenance as stuff like Grockle, Sassenach, naff, tee-nuc et al. Something with a fairly strong negative connotation, and hopefully incomprehensible to anyone not actually part of the same community. Army slang, polari etc have had some influence and they're hardly cute.
Perhaps you were applying a hilariously literal, irony- and sarcasm-free (ergo, I suppose, stereotypically American and/or German) interpretation of material that was laden with huge dripping gobs of it, as well as a large dose of unfamiliar vernacular?
It'd be a bit like dismissing all cinematic or televisual material produced in a romance language as flowery, insubstantial and incomprehensible just because of the sound of the dialogue and its association with snooty high-class city breaks, whilst completely ignoring vast tracts of classic Italian horror films, or gritty French drama such as "Engranages" (showing the seedy, gangland underbelly of... Paris) that uses the exact same tongues.
(much as I am pretty indifferent to HP - I find it a fairly cliche and poorly written thing - the author was after all living in scotland where such attitudes are pretty much necessary for survival, and I certainly picked up an air of it when made to sit through the first film)
Very little British entertainment material is cute for cute's sake, there'll usually be some kind of satirical undertone running through it, with the appearing-cute nothing more than a piss take, or used for contrast. When we actually have a stab at something that's Hello Kitty style cute, you end up with crawling horrors like Teletubbies or The Tweenies... *shudder*