What kind of animation/drawing style is used on K-On! Ura-on?
As noted in the comments, this is actually the super deformed style. Wikipedia describes it as:


  Super deformed or SD is a specific style of Japanese caricature where
  characters are drawn in an exaggerated way, typically small and
  chubby, with stubby limbs and oversized heads, to make them resemble
  small children. This style forms an integral part of what Japanese and
  American anime fans refer to as chibi.


Some examples: