It's a jocular exclamation. It means excellent, brilliant, great. It's the sort of thing you'd say when you got some good news or had a stroke of luck, 'ah, lovely jubbly'.
Well, would you use it? It depends whether you're influenced by television, I suppose, more than anything else. It's one of the slang phrases that was used by Dell Boy in the television series 'Only Fools and Horses', back in the 1990s. It actually goes back longer than that. These script writers are well aware of some of the earlier usages of phrases like this. In fact, you can take it right back to the 1950s, when there was an ice lolly called a jubbly, and there was an advertising catch phrase, 'lovely jubbly', and the Dell usage, I suppose, has come from that.