The word itself "Waifu" is the English word "Wife" pronounced by a Japanese speaker. Popularized by the Azumanga Daioh character Mr. Kimura when talking about his family to his Japanese students. Japanese is based off of vowels and modifying them with consonants. So, to approximate "Wife" the Japanese characters used are わ-wa い- i (pronounced 'e') and づ-fu The odd pronunciation gained internet popularity, and was picked up by forum posters and used in reference when talking about their favorite characters.



Today, it is used to talk about characters of all visual mediums whom the viewer would marry at the drop of a hat if given the opportunity.



Also given the strict guidelines of what a wife must be in Japanese culture, "Waifu" is also prescribed to women behaving a certain way. Very obviously beautiful, but coy and embarrassed to the point of blushing. Hence "Waifu mode"



Tl;dr



She's cute.