This interesting name is of early medieval English origin, and is primarily a nickname surname from the use of the Olde English pre 7th Century word "saelig", a derivative of "sael", meaning happiness, good fortune, used as a term to describe someone with a cheerful, happy disposition. The Middle English development was to "seely", meaning happy, fortunate, which became a surname as early as the 13th Century (see below). Occasionally, the word was used as a female personal name during the Middle Ages, recorded as "Sela" in 1219, and as "Sely" in 1221, and this may have been the source for some bearers of the modern surname, which has at least seventeen variant forms, ranging from, Seal(l)y, Seel(e)y and Sill(e)y, to Ceel(e)y and Zeal(e)y. The sense of "pitiable", which developed into the modern English "silly", is a later 15th Century usage. "
So we can forget about the silly stuff. The original meaning, "cheerful; happy disposition," fits me like a glove. Ask anybody. After all, my family does call me "Mr. Happy."