LORELAI: What is that?
LUKE: Oh, it’s a chuppah.
LORELAI: A what?
LUKE: A chuppah. You stand under it, you and Max. It’s for your wedding.
A chuppah is a canopy which a Jewish couple stand under when they are married. It’s usually a cloth or sheet (sometimes a prayer cloth) held up by four wooden poles. In Orthodox Judaism, there is meant to be open sky above the chuppah, just as is planned for Max and Lorelai’s garden wedding. The chuppah represents the home the couple are making together, which will always be open to guests.
Lorelai wonders whether it would be inappropriate for she and Max to have a chuppah, and gains reassurance from Luke on that point. Luke is actually correct: there is nothing specifically Jewish about getting married under a canopy (other religions do it too), and it doesn’t necessarily have to be religious in nature. These days there’s a bit of a trend for non-Jewish canopy weddings, and as long as it isn’t actually called a chuppah it doesn’t usually cause offence.
The chuppah is a gift from Luke to apologise for his behaviour towards Max. He knows he has been bit of a jerk about Lorelai’s wedding, and wants her to know he is still there for her as a friend. At the end of the scene, Luke and Lorelai are shown standing together under the chuppah as a sign that they will be married one day (when it happens in A Year in the Life, it will take place under a “canopy” beneath the sky, but not the chuppah).
It isn’t all that believable that the Luke we have got to know so far would actually make a chuppah for a non-Jewish wedding after getting the idea from a book (how did he know how to pronounce the word from reading it in a book?), and it seems awfully contrived.