I know I heard this term several times before, but when I look it up, I can't find anything on it. Thanks in advance.
The generalized "town [description]" effectively means "the person who is the biggest/best [description] in their/my town". Examples:
- Town drunk, i.e. the person in a town who is known to be a drunkard.
- Village idiot, i.e. the biggest (well-known) idiot in the village.
"Town hottie" therefore means:
The most attractive person in their/my town.