The story
From local + fluff from the relative "fluffiness" of the local interstellar medium resulting in a low density cloud of matter in relation to the surrounding space.
Etymology from Wiktionary, CC BY-SA 4.0.
Local Fluff
Today it means: A relatively dense region of interstellar space (containing our Solar System) that formed where the Local Bubble met another bubble, the Loop I Bubble Full definition →