The same thing that makes heaven to be heaven makes hell to be hell: you are around people who are like you. Can you imagine a world where nobody cared at all about anyone else? I'm not talking about people being a little selfish, but totally selfish. Can you imagine a world where everyone wanted to back-stab, steal, murder, rape, manipulate, taunt, or torture anyone who couldn't resist? Wouldn't that be hell?
What is amazing is that God loves even evil people. Because he respects their free will, He gives them the choice of developing selflessly or selfishly. Hell is the place where selfish people are happiest, and where they can do least harm to good people.
Why choose hell? I don't know why, rationally. But choosing evil is not a rational decision. It's an insane one, only it's worse than psychological insanity because we freely give up our rationality. When I think back on the times I said something cruel, or I hurt someone deeply by what I did, I can say now, "Why did I do that? It was insane!" Yet it seemed like the appropriate thing to do at the time. Even if I knew then that it was wrong I could justify it because of my mood at the time or because that person "deserved it."
That's how evil works: It temporarily blinds us. We are allured and charmed by what seems good. We choose the present pleasure of acting out our feelings and desires, rather than the deeper more lasting pleasure of acting out only the feelings that come from God. We all make mistakes and act selfishly, of course. What sets an evil person apart is a lifelong pattern of denial and justification of wrongdoing.
We might ask, "If you get to choose heaven or hell, can't evil people choose to go to heaven?" This is true. However, evil depends on deceit to work, and you can't get away with lying to anyone in heaven. You have to pretend to be someone's friend to rob them blind or back-stab them or manipulate them. But deceit is useless because the angels see right through it. Because angels are so perceptive, devils can't outright attack them. They choose to go to hell where they can have more success.
Unfortunately, even that doesn't work. Another of God's laws is that we are not allowed to hurt people in the next life. Everything you try to do to someone else comes back on you. That makes your life a heaven or hell depending on who you choose to be. The devils are frustrated people: They can plot and plan to do all kinds of horrible things, but they can't act on them without it all coming back on them. That's the hell of it. But we can see the mercy of God even in hell: He allows devils as much delight in their evil deeds as He can without letting them hurt others. And they can fantasize all they like. It's not much, but it's the best God can offer them because it's all they will accept.