What should be the balance between our obligations to others who are in need or emergency, on the one hand, and our rights to pursue our own ends, on the other? I don't know the answer to the question, though it's one I addressed in my book The Contract of Mutual Indifference. I think that most of us could and should do more than we in fact do in the way of fulfilling our obligation to help others; at the same time, I don't think anyone has a duty to others so extensive as to require them to sacrifice their own pursuits and their own ends without limit.
My answer to the question 'Is it moral to be happy in a world like this?' - where 'like this' covers the existence of enormous suffering - is: yes, it is. This is my reason for saying so. It's based on the axioms that ground one's thinking about ethics. If human lives matter at all, as the above question implies they do, then it is arbitrary to rule that your own life must fall out of consideration when making judgements about what it is moral for you to do.
Putting the same thing in another way perhaps, the claim that it would be immoral to be happy where others are suffering entails that attention should be given to halting or mitigating the suffering of those others, so far as is possible. But doesn't that mean that we think that they have a right to be happy? And if they have, then why not everyone, including you and me? It might be said that no one should be happy unless everyone is, but in view of the brute realities of the world - I mean such things as bad luck, ageing, interpersonal friction and animosity, crimes, grief, illness, accident - the simultaneous or permanent happiness of everyone is a utopia (in the bad sense), and ought not to govern our moral thinking.