When guys talk to each other we rarely use the term cute. If we do say "cute" when talking about a girl with a bro, it means we really like her personality but her body is just barely attractive enough for sexy sex. We do however use the term "cute" when talking to the girls we like, because it's not as threatening as, "I want to f*** you 6 ways from Sunday." In some rare cases guys do use the term "cute" in the sense that the girl looks especially innocent like a little girl or puppy.
If you don't like the compliment "cute", just respond, "F*** cute, I want to be sexy!"
Sexy is being confident and seductive, which gives guys boners. Cute is being bubbly and smiling all the time, which makes guys happy.
When I describe a girl as sexy, it means I wanna bone her. When I describe a girl as cute, it means I like her and/or I like to be with her. You can be sexy and cute simultaneously. That makes me wanna have sex and cuddle afterward.
But for one, I certainly used to be more into cuteness than sexiness, and I think that stayed with me since. In fact, whatever society says is sexy (being only in tights and lingeries, being whored out with make up and overly flirtatious and bitchy) is for me completely unattractive and repulsive.
You can't really tell, but there are guys who are attracted to one more, and guys who are attracted to the other.
I am the exception to the rule of longrvonhugen below, because cute girls give me boners by seeing them, while sexy only if they're doing something that involves me. :P