Futz (alternately Futzy) is a profanity which appears to refers to the act of sexual intercourse or some analog of Hell. It is used in the same manner as similar American English slang. It is often used to denote disdain or as an intensifier.
When the word was coined, Niven published under restrictions that precluded the use of real real cursewords. Given the word's obvious phonetic symilarity to the American English word "fuck ," it's likely Niven intended Futz to carry the same meaning and emotional connotations as the American slang, "fuck."