You can do what you want, but this is just my advice from personal experience. I wasn't saying that it was going to get wierd because you would lose confidence. It is because if she doesn't want any more than that, then she will probably feel uncomfortable around you after you confess your feelings. I love having men as friends, but it never ends up working. Because, just as soon as I get the exact friendship that I want out of them, they confess that they want more then that and everything falls apart.
But if you really like this person, go for it. That is really all that you can do. That way you will know for sure. But if she says no, then just drop it. Stay the same friend that you were before and don't ever mention it again. After a while things should go back to normal. But, I wish you luck. Maybe she really does like you, but is in the same situation as you are.
As for the hug thing, good friends would not be afraid to hug each other whether or not there is more than friendship there or not!