The story begins with Happy leaving his home, along with his dog and his best friend, on a quest to become the happiest person in the world. He learned magic, defeated monsters, and became rich, but he still wasn't happy.
The book's last pages have been torn out, and it continued to repeat in a loop. This resulted in Happy never being able to accomplish his goal. Kikitchi took the book home from the library and entered the story while in his house, causing Celebria to be shrouded in cloudy smoke and bits of paper. Touching the smoke would cause someone to turn into paper.
The Otogitchi siblings have a magic crayon that can finish the story and get rid of the curse, but it has to be the right ending or else whatever they create will disappear. Happy makes many attempts to work out what will make him the happiest person in the world, but they all fade, and the world inside the story continues to deteriorate. Thanks to Mametchi and the others, Happy realizes that his best friend, Lucky, is all he needs to be the happiest person. This turns out to be the correct ending; the world in the book restores and the curse on Celebria is lifted.