On Michael's part, it's genuine attraction mixed with strategy. He believes Estelle is the most popular HM left on the show. Trying to get her out didn't work, it painted her as an underdog and made Australia root for her even more. Villainising her got him nowhere, and now time is running out. So now he's realised his best bet is to "make up" with Estelle so that all her fans can see he's remorseful for the way he treated her and that he really does like her now etc etc. He's hoping to convert Estelle fans to vote for him. The closer he gets to Estelle, and the more he can get her to say that she likes him and she's grateful for his friendship (and now kisses BLECH) the better it is for him (in his eyes). I think he's full of shit when he says he really likes her now. He told Ben he just "ignores" everything that annoys him about her. I'd put money on the fact he still finds her annoying as fuck, he's just FINALLY deciding to ignore it because he's realised it's in his best interests to do just that. Too bad Australia isn't buying what he's trying to sell. He thinks doing this will gain him fans, when if anything he's just thrown away his win.
On Estelle's part, it's genuine relief to be liked by her former #1 hater mixed with strategy. No other Estelle fan will agree with me on this because they all think she's this innocent girl with 100% noble intentions, but this girl knows she's benefited from a storyline that painted her as the underdog and the outsider, the lone wolf who dances to the beat of her own drum and doesn't let other people's negativity stop her from being herself. She knows Michael reaching out for her friendship gives that storyline the 'perfect' ending: she stays true to herself the whole way, and her biggest detractor finally comes around to appreciate her for who she is, moral of the story is be yourself no matter what and people will end up respecting and liking you for it. Up until she used her SP and heard him nom her, Estelle always respected Michael. I'm sure it makes her feel nice to know that the same guy who used to despise her and bitch about her is now singing her praises and talking about how much he admires her. I believe her when she says she is genuinely happy right now, and I believe that happiness is because of her new friendship with Michael and what that symbolises to her.