In evaluating how happy a holiday Chanukah really is, we need first to establish what true happiness is and then evaluate to what extent Chanukah fulfills the criteria of happiness. I have identified  7 features of
happiness, and I think you'll agree that they are a good basis for judging happiness: 

1) Ideal happiness is sustained. 
2) Ideal happiness is unadulterated by negative side effects. 
3) Ideal happiness is deep-seated. 
4) Ideal happiness is based on accomplishment and achievement. 
5)  Ideal happiness involves the total mind or self. 
6)  Ideal happiness is hard to achieve alone. And 7) Ideal happiness involves something of meaning, importance or value.

1) Ideal Happiness is sustained. Fleeting pleasures are clearly not ideal happiness. Isaiah the prophet says that one day the redeemed of Israel will return to Zion, "and an everlasting happiness will be on their heads" (35, 10). The state of happiness we look forward to is an everlasting one.  Chanukah's joy has certainly been sustained. It has been so strong that the celebration has continued for over 2,000 years. Not only have we continued to celebrate Chanukah all these years, but Rabbi Samson Raphael Hirsch points out that the message of Chanukah, that G-d dwells in our midst and is concerned with our history, has sustained us through the worst of times. Maimonides furthermore points out that the salvation of Chanukah, the newfound political independence of the Hasmonean lasted "more than 200 years." Passing pleasures fade with time, but the candles of Chanukah only grow with the days. The wedding day
is certainly a happy one, but  a good marriage gains in happiness with time. True happiness only grows. 

2) Ideal happiness is unadulterated by negative side effects. So often 
pleasures in life are achieved at the expense of our bodies, our work, or our general well being. As it says in Proverbs (14, 13), "even in laughter the heart aches, and the end of happiness is heaviness."  The Rabbis even say that we shouldn't try to achieve complete joy in this world which is without the Holy Temple in Jerusalem. Only with the return to Zion "our mouths be filled with laughter" (Psalms 126, 2).   At first glance it may seem that Chanukah does not represent unadulterated happiness. Yes, the Maccabees achieved independence and
religious freedom for themselves but the independence was more perceived than real, and the Hasmonean dynasty eventually deteriorated into a cruel, Hellenistic regime. Yet, there is an element of ideal happiness
even in Chanukah.  In one of the great Hasidic works of philosophy, the Sfas Emes, it is suggested that this holiday does represent complete happiness because unlike other holidays, we can fulfill it completely.  On Passover, Shavuot (Pentecost), and Succos (Tabernacles) we should, according to the Torah, make a pilgrimage to Jerusalem and the Holy
Temple. We should offer certain sacrifices. Our inability to perform these rituals taints our spirit for the holidays. However, on Chanukah, all we need to do is to light the candles and praise G-d. With this we
have celebrated the holiday in its entirety, and our joy is complete.

3)  Ideal happiness is deep-seated joy. Everyone enjoys a good laugh, but a momentary laugh for a frivolous matter does not happiness make.  Sometimes people experience a kind of superficial happiness for a period of time, only to be shattered a short time later by the slightest problem or challenge. The Torah often speaks of the joy of the heart. If the delight isn't as deep as one's heart, it is not true happiness.  Chanukah may not seem like a big celebration. Yes, there is a custom to eat latkes or jelly donuts, but it is not an essential element of Chanukah. Other holidays, with their many meals and kiddush or wine may
seem to be much deeper forms of celebration.  But the author of the Shem Mishmuel points out that  the very lack of
external celebrations on Chanukah is the basis for claiming that the joy of Chanukah is in fact one of the highest form of happiness. The celebration of Chanukah is internal, deep inside the soul, and therefore represents the highest form of joy.  It requires no external celebrations or rituals. The light of a candle can penetrate deeply.  When a person looks at the Chanukah candles,  the challenge is how deeply our vision can penetrate the lights. Can we see within it that mystical light from the first day of creation when G-d said, "Let there be light" (Sfas Emes). The ultimate vision of clarity is  hidden in these days.  Our role is to uncover this concealed treasure. Some have asked, what was the miracle of the first night? Of course the candles burned the first night. After all, there was enough oil for the first day. Chanukah should have been a 7 day holiday.  The author of Sfas Emes answers that on the first night we celebrate the depth of the sincerity and commitment of the Maccabees. This depth experience leads to the deepest form of happiness.

4)  Ideal happiness is based on accomplishment and achievement. As it
says in the Psalms, "The fruits of your labor you eat, you are happy and it is good for you." When we can enjoy the fruits of our own labor, our resultant joy is all the greater.  Goethe writes, " It is enough to work. Joy comes by itself." Joy comes through a feeling of achievement and pride in the self. As  Rabbi  Nachman of Breslov once said,
"Happiness is finding a point, an aspect of self which is good."   The exodus from Egypt was G-d's doing. Therefore the two harvest
festivals, which celebrate our hard earned harvest,  Shavuos and Succos, are more joyous than Passover, which commemorates the exodus, because the joy of Shavuos and Succos is the joy of the labor of our own hands.  On Chanukah we emphasize in our prayers, "u-che-she-gavra malchut
Hashmonai", when the Hasmonean Kingdom was victorious, then we lit the
Menorah and G-d did all the rest. The beginning of the salvation was our doing. To be sure, without G-d's help we could never have defeated the Greek Syrians, but we can take pride in the fact that we had a hand in our own redemption.

  5)  Ideal happiness involves the total mind or self. Some activities are a pleasure for the palate but a pain for the stomach, good for the heart, but the legs take a beating.  John Dewey wrote, "Happiness is the feeling of the whole self, rather than some aspect of self." John Paul Sartre wrote, "Happiness is absolute engagement," feeling fully engrossed in what we love.
 Rav Saadya Gaon (circa. 1000) wrote that although there are many things which make people happy: eating, sex, eroticism, money, children, habitation of world, longevity, dominion, knowledge, etc., the ideal is the blending of them all.  The Shlah, the great 16th century Palestinian mystic writes that since the Greek Syrians wished "levatlam Torasecha"- to obliterate the Torah, we have to dedicate ourselves to "hasmodas hatorah"- the constant preoccupation with Torah, the opposite of what the enemy wished upon us.  This "total engagement" should be the highest form of Happiness. The author of the Shem Mishmuel points out that the three obligations of Chanukah engage our three faculties, guf, nefesh, and sechel, or body, soul, and mind. The obligation to thank  G-d on Chanukah is an obligation of the body. The obligation to recite the Psalms of praise or Hallel is
an obligation of the soul. The duty to light the candles represents the mind. According to this characterization, Chanukah is a total engagement of the whole self.   The author of the Sefas Emes writes that the opposite of "lehashkicham torasecha" - making us forget the Torah, is to remember the Torah.  Therefore, we are told that ideally, where  appropriate, we should light the hanukia, the Chanukah menorah,  next to mezuzah, that little box on our door posts. In this way, as we enter our homes to live our lives this week of Chanukah, we  can't forget the Torah. If Max Frisch, a Swiss writer wrote that "Happiness is consciousness set on fire,"  then our consciousness of the Torah during Chanukah should bring great happiness.

 6)  Ideal happiness is hard to achieve alone. As the Talmud notes, (Yebamot 62b) "One who is without a spouse is without happiness." So too, on Chanukah, a person cannot properly celebrate the miracle of the
oil and the miracle of G-d's presence in our midst, then and now, alone.  The obligation of the Chanukah candles entails the imperative that if at all possible, we must try to show the candles to others. As Maimonides put it, "leharot ulgalot hanes", we have to show and reveal the miracle
to all passersby, by placing our lamp in the most noticeable place.  

 7) Finally, we mentioned that ideal happiness involves something of
meaning, importance, or value. The rabbis mostly valued "simcha shel mitzva", happiness of or relating to a good deed or commandment. Even Aristotle wrote that "Happiness lies in virtuous activity." We may feel very happy relaxing all day, but after a time, a certain emptiness overcomes us. What does Chanukah celebrate? If it were just the war or victory, the holiday would have faded away centuries ago. In fact, during the second Temple Jews did celebrate many victory days. But Chanukah stands for much more. It stands for the re-establishment of our dignity, our faith, our ability to perform circumcisions, eat kosher food, and celebrate Shabbos, all of which were in great jeopardy under Greek Syrian rule. When we celebrate our ability to perform the very essence of our religion, the happiness it entails is deep and long lasting.   Is Chanukah a time of true happiness? Yes, and its message is one of achieving happiness through total engagement in our Torah and its study, over a long period of time, through deep and meaningful activities, and by spreading and sharing the happiness with others. How merry is Chanukah supposed to be? It should be very merry if we reevaluate the meaning of true happiness.