The most common and most likely answer to this crossword clue is the 7 letter word CUDDLES
I've seen this crossword clue in The Daily Telegraph
C
U
D
D
L
E
S
More clues leading to the result CUDDLES
Buddy explains!

The straight part
We know that "lies close" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case lies close = cuddles.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does CUDDLES mean?
CUDDLES noun- A snuggle; an affectionate embrace, often given to family members and close friends.
- To embrace affectionately, lie together snugly.
- To cradle in one's arms so as to give comfort, warmth.
- To lie close or snug; to crouch; to nestle.