I was under the impression, 5'6" at 125 lbs was normal, slim, not overly muscular or extra fat beyond the normal 21% body fat considered average for most women. Then, for women every inch of height adds 3-6 pounds of weight. And for every inch lost, substract that. So average weight for a woman at 5'3" should be about 110-113 pounds, give or take a pound or two. Now, this is for the average. Add in some extra muscle (and even a little bit extra wouldn't be too noticeable to people not knowing the difference between average and "lean") and that body weight can have anywhere from and extra 5-10 pounds. More muscle then an extra 5-10 pounds does start to show in extra definition and would definately be considered "athletic" for a body type.
Then again, 5-10 pounds of extra muscle wouldn't show but 5-10 pounds of fat would. It will have to depend on the person and genetics for how much that shows. If that person is lucky and all the extra fat goes to the boobs, hips, and buttocks to make them look "endowed" but still average. Then many in our society would call that a hottie. If it all goes to the belly, or thighs for thunder thigs or even placed wrong along the upper part of the hips to give the butt a strange shape.... then it does look on the chub side.
For most women, it's going to be the later effect of having 5-10 extra pounds of fat. So a 5'3" at 125 pounds might indeed look chubby, but in the right clothes would be very hard to notice. It could also be someone very lean and on the edge of some muscular definition for a women.