A hotwife is term used in swinger communities to refer to an attractive married woman who has sexual relationships with other men, typically with the consent of her husband, who is commonly known as a cuckold. As a consensual dynamic, this one can be very arousing for both people. For the male partner, there's the arousal of seeing his "hot" wife with someone else, and possibly a sense of humiliation in being displaced. For the female partner, being able to wield her sexual power to attract other partners and enjoy those relationships can be really empowering as well. For both both partners, the taboo nature of "cheating" on a spouse can also be a turn-on.
A hotwife may also be called a slutwife.