Well, this is an informal letter, so you have so much freedom in writing the way you like. However, if this is for a particular examination task, I wish you should not sound too slang. For exaple,
Hi, everything is OK?
This is fine when we talk, but sounds too slang for writing.
Hope everything is fine with you.We celebrate Bon festival in July which comes back to a story which seems to be about a disciple of Buddha using his power to release her mother suffering in hungry ghosts' realm and he becomes successful.
.... the word "which" gets repeated too soon. Also this sentence is crowded with too many ideas.
We celebrate the Bon festival in July which originates from a story of a disciple of the Buddha, who used his supernatural powers to protect his deceased mother from hungry ghosts.