"Hot-reload" is the ability to reload changes to code or assets while your game is running and without losing your place in the game.
So for example you can travel to the right spot in your map to see the fancy complicated animated castle, and while your game is still running you can open the image editor (maybe pyxel edit) and touch up your images. Every time you save, the new image gets loaded into your game and you can see it in context.
Or for example you can travel to that new enemy and fine-tune the code for the enemy's behavior - right as you're playing the game.
The two documents below explore this in more details: