I think there are two main things to be differentiated here:
1. Being happy at work
2. Being happy outside of work
Certainly work-life-balance can only work optimally, if both 1 & 2 are met, however I am not a fan of people saying that you need to push for "being happy outside of work" in order to compensate for your misery at work.
If you are not happy at work, no activity outside of work will compensate enough for it. And I would be very careful to "use" family life in order to make up for misery at work. Usually this ends up in breaking up the family, since you let out all that's stressing you at work when you are at home with them.
Now, how can one be happy at work? And how can one stay happy in the face of constant death, patients failing treatment, pressing hours, budget cuts, hostile colleagues, regulations etc...
This is something that needs to be divided again into two fields. There are things you can influence and things you cannot influence.
You can walk away from certain things (means switching jobs!) if you cannot live with them. For example hostile colleagues/bosses. You can also try to steer around regulations, budget cuts, etc. by taking up work in another sector (for example switch from private practice to hospital based care).
But there are certain things you cannot walk away from and these include patients failing treatment and dying.
You can however limit this effect by "choosing" (if you can), what you want to focus on. People who focus on treating breast or prostate cancer will generally see less failing and dying patients than those dealing with brain tumors (mainly GBM) or lung cancer. If this suits you (and you don't find it boring to contour breasts every day), then do that!
What I have also figured out is that you need some kind of positive / open culture of interaction in the clinic.
One of the main reasons I would never go to private practice is that I would miss interaction with fellow physicians in the clinic as well as in the hospital. You can always ask for an opinion and learn from each other, argue about interesting cases. You miss out on all of that if you change to a private practice setting. You are basically more or less alone then.
Another good things is to get to know who you work with and this does not include only your physician colleagues. You spend more time with your coworkers than you family, thus you should get to know them well. Physicians often have a problem (especially when they are out of residency) to "look down" to "lower level" coworkers and interact with them besides strictly on a professional level. Go get a drink with a couple of technicians, physicists. Go to the movies with a bunch of people. And by all means do not restrict these activities to the formal occasions like a christmas / new year's party or the occasional "someone-has-birthday-and-brougt-a-cake-in-the-lounge-get-together".
It's also not a bad idea to take matters less serious and informal (when you are NOT with the patient) when discussing cases with colleagues. I have seen chiefs of clinics being terribly "correct" when reviewing cases and discussing them with residents, shouting and critisizing them, the moment something pops up in the discussion that may be deemed inappropriate. I don't see why we need to be totally sarcasm-free and politically-correct, when we are not talking with the patient or his relatives. We are dealing with cancer and dying people every day, we are not machines. And if we are not supposed to break down and cry, we need to express our fears and thoughts in some way with colleagues.
So when a resident comes up and says that he saw the patient with a T4N2-hypopharynx SCC 3 months after primary radiochemo in complete remission and doing fine, I may say "Great, well done! Let's wait up when his NSCLC shows up now. He is still smoking, isn't he?" That's sarcasm and some may even say it's evil, but it's the truth (at least in some cases, most patients will probably simple develop a local recurrence before a developing a second cancer). I have seen chiefs saying "How dare you talk like this about that poor patient?" and going on to lecture for hours.
There is a fine line there, between developing evil sarcasm and grasping what we do every day, why we do it, what to expect from it and talking open about it.
In all don't expect to get "scratch-free" out of this job. We are not machines and we are dealing with death every day.
You will cry because of certain patients. These are the cases, that for some reason left a mark. Maybe they were young ("too young to get cancer"), maybe the reminded you of someone you know/knew, maybe you grew fond of them over the years. Maybe you even grew fond of their relatives and not the patient. It's okay to cry. The only problem is always thinking about those few cases and fogetting about the hundreds of other cases that went well.