Why is було used here? Would it not be був/була depending on the gender of the speaker?
Because it's literally "IT WAS not merry to me yesterday"
Я зараз розумію. Дякую!
What's the better translation for this sentence? (A) "I did not feel happy yesterday." (B) "I did not have fun yesterday." They seem like two separate notions in English--do they really map onto the same sentence in Ukrainian?
The correct one is "I did not have fun". Happy = щасливий ≠ веселий. Веселий is similar to the German "froh", it means you are cheerful, having fun.
"I didn't have a good time yesterday" should be accepted
And also "It wasn't funny for me yesterday"
fun ≠ funny
Fun -> веселий, весело
Funny -> смішний, смішно
In case as an alternative, does "я не був веселий вчора" sound natural?
Yep it's accepted.