Hugging and dancing can be grim (9)
I believe the answer is:
embracing
'hugging' is the definition.
('embrace' can be a synonym of 'hug')
'dancing can be grim' is the wordplay.
'dancing' is an anagram indicator.
'can'+'be'+'grim'='canbegrim'
'canbegrim' anagrammed gives 'EMBRACING'.
'and' acts as a link.
(Other definitions for embracing that I've seen before include "Clasping" , "welcoming" .)