Some things...
You don't seem to be using jQuery at all, so why both with the {jquery} macro. Also, this is being displayed in the page, so don't add the head or body tags.
Try this:
{html}
<script>
function displayMessage(){
alert('Hello World!');
}
</script>
<form><input id="clickMeInput" type="button" value="Click me!" onclick="displayMessage()" /></form>
<p>By pressing the button above, a function will be called. The function will alert a message.</p>
{html}
If you want to use jQuery, Atlassian already bundle it in Confluence, but their version is referenced using AJS.$ rather than just $.
Try this:
{html}
<script>
AJS.toInit(function(){ // use instead of $(document).ready()
AJS.$('#clickMeInput').click(function(){
alert('Hello World!');
})
})
</script>
<form><input id="clickMeInput" type="button" value="Click me!" /></form>
<p>By pressing the button above, a function will be called. The function will alert a message.</p>
{html}
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