Fishyfriend: nope, bubble nests aren't always a sign of happiness, just a general sign of good mental and physical health and a way to mark territory. Because bubble nests are so fragile, too much water movement can inhibit his attempts at making bubble nests. Also, older bettas or younger bettas won't make as many as others, and even those in their prime might not make them if they don't feel a need or urge to. There are actually lots of bettas that don't make too many bubblenests in their lives, yet they are very well cared for.
Heather: yes, it's actually a nest of sorts. The female lays eggs, and the male puts the eggs inside of the bubbles and around the bubbles so that they float and so that the newly hatched fry have somewhere to hang from until they are free swimming, and even after they are free swiming they hang around the nest so Dad will protect them.