What does 形势大好 in this situation mean
漢典
shows that 形势 means [situation; circumstance; condition; state of affairs]
在其周围环境中所处的情形；或在一定时间内，各种情形的相对的或综合的境况。

According to the context, 
the author was talking about 
社会形势大好
because there were many 好人好事 everyday.

Thus, I think 形势 means 气氛 here.

The social atmosphere is very good.