From The Devil's Dictionary (1881-1906):
HAG, n. An elderly lady whom you do not happen to like; sometimes
called, also, a hen, or cat. Old witches, sorceresses, etc., were
called hags from the belief that their heads were surrounded by a kind
of baleful lumination or nimbus -- hag being the popular name of that
peculiar electrical light sometimes observed in the hair. At one time
hag was not a word of reproach: Drayton speaks of a "beautiful hag,
all smiles," much as Shakespeare said, "sweet wench." It would not
now be proper to call your sweetheart a hag -- that compliment is
reserved for the use of her grandchildren.