The current emotion system has a flaw in that moodlets are applied at full strength and remain that way until they dissipate. A more realistic approach would be for their intensity to grow/diminish over time, leading to fewer abrupt mood swings.
Additionally, (some) positive emotion moodlets could fully rely on happiness boost without providing any additional increase (i.e. strength +0) - resulting in Sims less likely to be in good mood all the time.