Squallida translates to "squalid" or "bleak." It's a strong, evocative adjective that isn't commonly found in everyday conversation or every pop song, making it stand out.
In the context of the song, Gianni Morandi uses it to describe his life without Loredana: "Ma che squallida vita è la mia senza te" (But what a squalid life mine is without you). This word powerfully conveys the depth of his despair and the emptiness he feels, making his longing for Loredana even more poignant.
Gianni Morandi sings this one to a girl who is gone, and he says her name like he is calling down an empty street. It opens with a plea, "Loredana ricordati di me" (Loredana, remember me), and then goes straight to the detail he can't let go of: "Di quel bacio che tu hai dato a me" (of that kiss you gave me). One kiss, and he is still crying over it: "Mi fai piangere sempre" (you always make me cry).
The verses are short and the feelings are big, very early-sixties. She comes back to him "come un eco" (like an echo), his heart "non palpita più" (doesn't beat anymore), and life without her is "squallida" (dreary, miserable), a nice strong word to learn. The best line is the frustrated one: "Ma perché non finisci di vivere in me" (but why don't you stop living in me). Then the chorus asks the same question over and over, "Loredana perché tu non vieni da me" (Loredana, why don't you come to me), ending on "io amo te" (I love you) four times. Note the word order: Italian usually says "ti amo", and "io amo te" puts the stress right on you.