In this context, it is an expression that means "just good things". The sentence means that the history of fireworks isn't only good things. It's saying that there is also bad parts or less happy parts to the history of fireworks. So, you are correct about what a hug is, but the expression, "it isn't all...." means that there are opposite parts to it, as well. I hope this helps!

Hugs are good and friendly. The history of fireworks was not all good and friendly.

The word 'all' here does not just relate to 'hugs' but to 'hugs and celebrations'.

Everybody loves fireworks-- the lights, the colors, and, of course, the big boom. But the history of fireworks isn't all hugs and celebrations. A hug is something that brings you joy, so are celebrations. But in this context "all hugs and celebrations" means that the history of fireworks are not filled with only happiness. A part of it may include pain, like war. So, it's not "all hugs and celebrations". "all" in this context could be replaced with "just about".