Here is the fare information for DC Circulator:
Fares & Payments - Washington D.C. Circulator (dccirculator.com)
Pass not needed - You can pay cash or coin - exact change only. Or you can pay with a "pass" called the Metro "Smartcard" - which can be purchased at any metrorail station and other locations:
Sales Locations | WMATA . Cash might just be most convenient because there is a cost for the card plus however much fare you want to load and then the card is "forever"- which is fine if you are coming back again relatively soon, but not so much if you will not be coming back again. And each passenger might have to have their own card - I am not sure if you can swipe one card for multiple pax for the circulator (you cannot do that for using the metro trains, for example because it has to clock you in and out to determine the fare). You might call them to find out. Otherwise, you would pay I think $5 per smarttrip card plus the cost of the circulator fare which is only $1 per trip.
Fireworks - kinda depends on which way the wind is blowing so the smoke doesnt obscure the view. But usually between the Washington Monument and the Capitol. Watcing from the steps of the Lincoln Memorial (I think thats allowed) would be very nice, too.