$$xu_x+yu_y=0$$
FIRST PART, Solving with the method of characteristics :
From $\quad xu_x+yu_y=0 u \quad$ the set of characteristic equations is :
$$\frac{dx}{x}=\frac{dy}{y}=\frac{du}{0}$$
because the coefficient of $u_x$ is $x$ , the coefficient of $u_y$ is $y$ and the coefficient of $u$ is $0$ .
From $\frac{dx}{x}=\frac{dy}{y}$ the equation of the set of characteristic curves is $\ln|y|-\ln|x|=$constant, or :
$$\frac{y}{x}=c_1$$
To be finite $\frac{du}{0}$ implies $u=$constant. So, the equation of the set of characteristic curves is :
$$u=c_2$$
The general solution of the PDE expressed on implicit form is :
$$F\left(\frac{y}{x} \:,\: u\right)=0$$
where $F$ is any differentiable function of two variables.
Solving this implicit equation for the second variable leads to the explicit form :
$$u=f\left(\frac{y}{x}\right)$$
where $f$ is any differentiable function.
Note : Since $f$ is any function, the solution includes $u=\phi(\tan^{-1}\left(\frac{y}{x}\right))$ where $\phi$ is any function. This is equivalent to $u=\phi(\theta)$ where $\theta=\tan^{-1}\left(\frac{y}{x}\right)$ and with the function $g\equiv f(\tan^{-1})$.
SECOND PART
Answer to the question of graphical interpretation :
Your graph represents the set of characteristic curves
$$y=c_1x$$
drawn with various values of $c_1$
On one characteristic curve corresponding to $c_1$ :
$$u=f\left(\frac{y}{x}\right)=f(c_1)$$
since $c_1$ is a constant, $f(c_1)$ is constant, so $u$ is constant.
$$u=f(c_1)=c_2$$
Thus $u(x,y)$ is constant all along the characteristic curve considered.
But $u(x,y)$ isn't constant if the point $(x,y)$ goes from one curve $(c_1)$ to another curve $(c'_1)$, because $u(x,y)$ varies from $f(c_1)=c_2$ to $f(c'_1)=c'_2$ which are different.
If you draw in 3D the function of two variables $\frac{y}{x}$ you obtain the representation of a particular solution of the PDE : $u(x,y)=f\left(\frac{y}{x}\right)=\frac{y}{x}$ in the case of $f(X)=X$. Of course, this isn't a representation of the characteristic curves.