The Collaborative International Dictionary of English v.0.48:

Gayly \Gay"ly\, adv. [Also spelled gaily.]
   1. With mirth and frolic; merrily; blithely; gleefully.
      [1913 Webster]

   2. Finely; splendidly; showily; as, ladies gayly dressed; a
      flower gayly blooming. --Pope.
      [1913 Webster]

WordNet (r) 3.0 (2006):

gayly
    adv 1: in a joyous manner; "they shouted happily" [syn:
           happily, merrily, mirthfully, gayly, blithely,
           jubilantly] [ant: unhappily]