Swell has more than one meaning. It has the slang usage that you refer to, where it means good, great, or really good. In the slang sense, it also can be used to say that something is not good at all. For example, if something happens to someone that's not so good, they might say, "That's swell." It's a little bit odd, but this word can be used to express opposite meanings that are understood in context. If you receive a gift that you want very badly, everyone would understand that you meant 'great' if you describe the gift as swell. On the other hand, if you step in a mud puddle and get your shoes wet and dirty and say, "Isn't this swell," everyone would know that you meant exactly the opposite. In these slang usages, the word swell is a little bit dated, and fewer people use the slang version of swell these days. In the past, it was widespread. The second meaning of the word is that something is enlarged and swollen. If you cut your finger and it gets infected, you could say that your finger is beginning to swell, or say that it is swollen. I hope I've helped.

Don't use it. "Swell," meaning very good, is nonstandard and colloquial. Worse yet, it's outdated. It isn't used any more. The closest equivalent today would be "cool." The last time I can remember hearing it was in the 1960s in an ad campaign for the toy company, Mattel, which used the slogan "You can tell it's Mattel--it's swell!" It used to have a pair of related meanings: a) Elegant, stylish, aristocratic; to quote a song lyric, "What a swell party this is;" b) Good, great, terrific. I can't write an example without thinking about the 1950s. "Hey, let's find some clothespins, use them to hold playing cards against the spokes of our bikes, and ride around the neighborhood!" "That's a swell idea! I know where my mom keeps clothespins!"