Its a term of endearment, like calling someone "sweety". Girls use it much more often than boys do, and in Naruto its is seen a lot when one person is talking about or talking to someone they like. Sakura and Ino use it to express their interest in Sasuke, and Naruto uses it to express his interest in Sakura. Usually not having honorifics at the end of a persons name, which you do not know well, is considered rude, and so "-san" is usually used, although using "-kun" or "-chan" is not strange either.