Olivia's household hate Malvolio because he is a puritan. AKA a guy who doesn't have any fun and expects the same from his fellow servants. He is a party pooper- no music, no dancing, no acting no fun. In the Elizabethan times people would have hated this! This is why Olivia's household hate him.
Of course, this was all a prejudice but from how Malvolio (Puritan) was treated we can see Shakespeare also disliked Puritans. This could be because Puritans thought enjoying theatre was also unallowed(a sin) and of course Shakespeare would disagree since he wrote plays for theatres.
