Lovely thing diminished, that is (5)
I believe the answer is:
cutie
'lovely thing diminished that is' is the definition.
'cutie' can be an answer for 'lovely' (I've seen this before). I am not sure about the remainder of the definition.
'diminished that is' is the wordplay.
'diminished' becomes 'cut' (I am not sure about this - if you are sure you should believe this answer much more).
'that is' becomes 'ie' (synonyms).
'cut'+'ie'='CUTIE'
Can you help me to learn more?
(Other definitions for cutie that I've seen before include "Attractive young woman (slang)" , "something pleasing" , "Smart female" , "beauty" , "an attractive thing" .)