So I know that hana-bi (はなび) means fireworks but if I want to say in more artistic way (and not about fireworks) flower of fire/flames can I say hana hi (はなひ)? Whether it will be understood? And can i still write it as 花火 or something different. Or maybe it will always be a mistake. Thanks in advance!
火の花 (building on OP's suggestion of 花の火) might be a good answer.
For what it's worth, Mario's fireball is described as 火の玉 (= ball of fire) - not "fire that looks like a ball" or "spherical fire" but literally "ball of fire":
I think 火の花 is ambiguous.It is difficult to be able to be judged fire or flowers by the word without context.
If you want to say about flowers, you say 火のように美しい花(beautiful flowers like fire) and if you want to say about fire, you say 花のように美しい火(beautiful fire like flowers).
If you use のような, のように, it will be clear.