Some people contend that using the term loli to describe a character always implies a sexual attraction on the part of the speaker, which is false, since we could also say we like Petite woman, is it a crime to like cute girls?. There are some who claim that a character's given age can exempt them from loli status (for example, the character Konata from Lucky Star, who is 18 years old but loli can be 200+ years old, Loli does not describe an age,it describes a body type (Petite and cute).
Related to this is the slang otaku term "moe" (萌え, pronounced [mo.e]), which literally means "budding," and a pun on "burning" with passion or light or life. This originally described a sort of protective instinct invoked by certain characters. These days it's either used by people to describe girls that are Adorable and cute you want to take care of them.
The rule 63 version of Loli is Shota, which is typically preferred by either overly maternalistic women or extra, extra creepy men.