Ok, got to thinking about some of this so I think I'll give some tips for this.

To do a wall hug you need to have the player near a wall and then press the wall hug button. Then you can have the player put his back to the wall and the only movement accepted wout be to move on the Y axis in C-move. Best way to handle this is to do all the movement based on the players state, In this situation a "wall_huge" state.