Could someone explain to me how the word "haben" is used here. Is it a fixed rule to use "haben" with Hunger?
Yes, it is a fixed rule. In German, you usually say "Ich habe Hunger" which literally means "I have hunger". You could also say "ich bin hungrig" ("I am hungry"), but it's not used as frequently.
You use 'haben' here because you have multiple women. Plural people = plural form.
how is hunger a noun ? why is it capitalised ?
Hunger in German is the same as the English word hunger. They are both nouns. "I have hunger" is the literal translation. Maybe that helps you to see it as a noun?