Looks like the Seattle Sea Fair. That is a tourist boat rented out for occasions like this where people want to go watch a boat race (that's why they are there), party, and not have to worry that the skipper will be too drunk to get them home ok. When not doing this it is probably used for moonlight dinner cruises or tours along the Waterfront. Unfortunately when I blow the picture up it is too blurry to read the banner, or the name on the bow. The boat is probably built to US Coast Guard "T" boat standards for boats under 100 gross tons carrying passengers for hire.
Those are the Navy's Blue Angels team zooming past and that is Mercer Island in the background. This is on Lake Washington, a large lake east of Seattle, but relatively protected waters. Every year there is a big celebration in July with parades, fairs, etc and it all ends with a hydroplane race on Lake Washington.
