Is familiar we hear with happy bunch... (7)
I believe the answer is:
Here is my best explanation:
'bunch' is the definition.
'is familiar we hear with happy' is the subsidiary indication.
'is familiar' becomes 'knows'.
'we hear' shows a homophone (sound like).
'with' means one lot of letters go next to another.
'happy' becomes 'gay' ('gay' can be similar in meaning to 'happy'**).
'knows' sounds like 'nose'.
(Other definitions for nosegay that I've seen before include "Posy of flowers", "Scented bunch of flowers", "Small posy", "Bouquet", "Gone, say (anag)", "Old-fashioned posy", "Small bouquet", "Bunch of scented flowers", "Fragrant bunch of flowers" and "Corsage".)