He is so sweet, innocent and naive which makes him so funny because he is very different and clearly not from the real world. Olaf sees most people as friendly and in general he makes it look like he doesn't believe there is evil in the world. So so adorable :D
Olaf: Who's the funny-looking donkey?
Anna: That's Sven.
Olaf: And who's the reindeer?
Anna: . . . That's . . . Sven.
~~~
Olaf: I've always wanted a nose! It's so cute! It looks like a little baby unicorn! (something like that)
~~~
Kristoff: Don't be seen!
Olaf: *sliding down the hill* I won't! *a few seconds later* Hello!
Random Lady: *screams*
I also like the part when he told Anna that some people are worth melting for, but that's more sweet than funny.
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