Lively is one of those strange adjectives that end in "ly" so that it SEEMS like an adverb, as you are using it here! And that is why it sounds funny to you...because it is an adjective, to modify/describe a noun, and can't be used as an adverb, to describe/modify a verb.
The host was lively with the audience, and his humor made audience laugh.
The host's lovely interactions with the audience were the cause of much happy laughter.
The audience laughed happily at the humorous interactions of the lively host.
There are so many ways to say things, aren't there? Play with it until you like it...but don't try to modify "interacted" (verb) with "lively" (adjective). :)