Honest good humor is the oil and wine of a merry meeting, and there is no jovial companionship equal to that where the jokes are rather small and laughter abundant.

This quote means that when people are together and having a good time, honest humor can make it even better. It is like the oil and wine of joyful occasions–it makes the experience much richer. Furthermore, the quote suggests that it is best for the humor to be light-hearted and funny without being too serious. If everyone laughs and has a great time, it creates a bond between the people that is hard to achieve elsewhere.