To add to this great explanation, the name itself is a reference to the genre's valuing attempts to reproduce lower-quality audio effects of a bygone era, things that would have been considered imperfections in the past but which we now regard as nostalgic: lo-fi = low fidelity.

Another wonderful example of an artist using techniques like these to create a sense of happiness and warmth is Atmosphere's "Sunshine" (which is also just an amazing song).

The language teacher in me also wants to add that different terminologies employed by different age or cultural or demographic groups are inevitable!