The meaning of 逍遙 xiāoyáo is obscure. The two characters almost exclusively occur together in Pre-Han literature, the earliest examples in the Book of Poetry or Songs, centuries before Zhuangzi, where they seem to describe, in two cases, a young man "sauntering," with the sense of showing off, or, in the third, "lingering" at his girlfriend's house. The phrase occurs thirteen times in the roughly contemporaneous Chu Ci, where it seems consistently to mean something like "wander." The only appearance of either character by itself is 遙 yáo once in Xunzi, a work written shortly after Zhuangzi, where it is contrasted with 近 jìn, "near," and so clearly means "far." The commentator Lu Deming takes advantage of this in his effort to find a meaning for the phrase, equating 逍 xiāo with 消 xiāo, "disappear" and hence reading the phrase as "vanishing distance." This makes sense as a description of a journey for the title of the first chapter but not for the two times Zhuangzi actually uses it in the inner chapters, in 1:07 to describe the way one naps and in 6:06 to describe doing nothing. So I don't think 遙 yáo connotes "far" in this context. Since 逍遙 xiāoyáo is a rhyming reduplicative, however, I suspect it is there as much for the sound as for meaning; hence, "Hippy-dippy."
I'm not sure I'm entirely happy with this translation though; the reference to modern culture might be too specific. An alternative I liked was "lingering languorous journey."