I want to cuddle old Penny absolutely (6)
I believe the answer is:
indeed
'absolutely' is the definition.
(both can be used to agree with something)
'i want to cuddle old penny' is the wordplay.
'want' becomes 'need' (needing is a kind of wanting).
'to cuddle' means one lot of letters goes inside another.
'old penny' becomes 'd'.
'need' going around 'd' is 'ndeed'.
'i'+'ndeed'='INDEED'
(Other definitions for indeed that I've seen before include "Really - truly" , "even" , "In truth, in fact" , "Certainty" , "still" .)