"Free-motion" just means that your stitching isn't machine-guided - you are free to drive the fabric in any direction, instead of driving it forward in a line as when you're allowing the feed dogs to drive it. :)
You can do squiggles, but you can also draw anything that you can draw with a pencil on paper - loops, flowers, color-book drawings, feathers, swirls, spirals, etc.
And you can go beyond line drawings into free-motion embroidery - or thread-painting, as it's sometimes called.