karajanhra

Cats can be strange little things; one of my mom's acts exactly the way yours does (always hunkered down or hiding, vaguely hostile, never seems to eat), and she's lived with us for a year and a half - yet when she lived with her former owner, she was an angel. This is a probable summary of what's wrong with the cat:
1) Cats often don't like new people and will continue to not like them long after they've stopped being new.
2) Cats are not pack animals and don't have the same social requirements that humans and dogs have.
3) Cats will often do things as they please for no reason apparent to us.

Also keep in mind that your want to "hug it and pet it all day while its relaxing in my lap" requires entirely unnatural behavior from the cat (putting itself at the mercy of a much bigger creature) and that not all cats enjoy being petted even by their owners, let alone complete strangers. Leave the cat alone; it's not gonna happen.

Edit: I bet that the cat isn't spayed; unspayed female cats tend to be less friendly than spayed ones.