Cuddled children finally with eldest wriggling (7)
I believe the answer is:
nestled
'cuddled' is the definition.
('nestle' can be a synonym of 'cuddle')
'children finally with eldest wriggling' is the wordplay.
'finally' suggests the final letters.
'with' means one lot of letters go next to another.
'wriggling' is an anagram indicator (letters wriggle or move about).
The final letter of 'children' is 'n'.
'eldest' with letters rearranged gives 'estled'.
'n'+'estled'='NESTLED'
(Other definitions for nestled that I've seen before include "Lay snugly" , "Cuddled or settled into" , "Huddled together" , "get comfortably ensconced" , "Settled comfortably, against, in something" .)