Figuring out how to do Orientation and Position with PrimaryPartCFrame?

You can translate a CFrame in world space by adding or subtracting a Vector3 value. This method will also keep the rotation of the coordinate frame intact.

local model = workspace.Model
local plr = game.Players.LocalPlayer
local mouse = plr:GetMouse()

local targetCF = model.CFrame + Vector3.new(mouse.Hit.p - model.Position)
model:SetPrimaryPartCFrame(targetCF)

If you want to lock the y axis of the CFrame, instead of adding the whole Vector3, just add the individual x and z components of the Vector3. In addition if you want to make the model actively follow the mouse instead of just setting the position once, you can utilize the Move() event of the mouse.

local model = workspace.Model
local plr = game.Players.LocalPlayer
local mouse = plr:GetMouse()

mouse.Move:Connect(function()
	local distanceVector = mouse.Hit.p - model.Position
	local translateVector = Vector3.new(distanceVector.X , 0 , distanceVector.Z)
	local targetCF = model.CFrame + translateVector
	model:SetPrimaryPartCFrame(targetCF)
end)