Chabolo is a Spanish slang term that refers to a humble dwelling, like a shack or a small, modest home. It's a word with a bit of a gritty, urban feel, not commonly found in everyday pop songs.
In this song, the narrator uses chabolo metaphorically to describe their heart, saying "Te hablo de mi chabolo, Mi corazón está preso" (I'm talking about my shack, my heart is imprisoned). This creates a powerful image of their heart being a confined, perhaps even rundown, space from which they cannot escape a powerful love.
La Femme's "Cha-cha" drops us right into a wild beach day with a favorite girl who's looking for drugs, or "farlopa," which our narrator isn't into, especially with the police around! He'd rather enjoy the morning, hit up a mezcal bar, and then a taqueria. He's definitely not a fan of clubs, calling them "malo y los borrachos" [bad and the drunks], preferring the fair where he can "bailar todo el día" [dance all day].
Things get a bit more intense as he talks about his "chabolo" [shack/hovel] and how his heart is "preso" [imprisoned] by a "gordo" [fat/big] love he can't escape. He's annoyed by it all! He describes his girl as "guapa como una luna" [beautiful like a moon] and "chula como una pintura" [pretty like a painting], calling her his "princesita de Andalucía" [little princess of Andalusia]. But despite the hot embraces that burn him, they have a problem, and now he feels "encarcelada" [imprisoned] too. It seems like this cha-cha isn't just a dance, but a sticky situation they're caught in!