What does it mean that test coverage is not 100%? What is the definition of coverage?

It means that there is at least one sub-diagram in the VI under test that is not executed by any test case. In general, test coverage is a number between 0 and 100, which, given a VI and a test suite (containing a set of test cases), is given by [the number of subdiagrams in the VI visited by at least one test case / the number of all subdiagrams in the VI]*100.