When we entered the palatial dining hall, on the wall we saw a striking character “shou” rimmed with golden satin, and a large red Arabic numeral “ninety” (If it was a numeral use that form - 90) below it. On every table there were flowers of various colors. In the middle of the hall, a peach-shaped birthday cake, symbolizing longevity, is (not "is" - use the past tense, "was")particularly impressive because we have (had) never seen such (a) big one. A relaxed and joyful atmosphere prevails (prevailed - past tense) at the party.
I would make a few changes:
When we entered the palatial dining hall, we saw a striking character, "Shou", on the wall. It was rimmed with golden satin and there was a large red Arabic numeral 90 below it. There were flowers of various colors on every table. In the middle of the hall, a peach shaped birthday cake, symbolizing longevity, was particularly impressive because we had never seen such a big one. The atmosphere at the party was both joyful and relaxed.
In this part, I wanted to create a joyful atmosphere.