From my understanding of it, hacking is refers to people who like to solve problems and build and create things, and applies to people who have an obsession with learning everything about something. So a person may learn to program in all the major languages, they will read technical manuals, they will learn electronics to an advanced level, they'll learn the telephone and Internet infrastructure, they'll load individual operating systems up onto their computer and read the manuals to each operating system and study them to find the holes, etc...a hacker is not interested in doing anything malicious or destructive (unless maybe defending their country by doing bad things to foreign countries trying to do the same to their country).
"Hacking" got a negative connotation when people started using these skills for destructive and criminal purposes however. From what I have read, the term for such malicious hackers is/was actually "crackers."
However, outside of the hacker culture, the general term used by the media and so forth is "hacker" and also cracker is known as being a racist term to others, so one can see how people would be reluctant to use it. Today it seems more the terms are White Hat hacker and Black Hat hacker (white hat is good, black hat is bad).
Although referring to technology, the hacker philosophy can really apply to any art or science. If you study music and learn everything you can about music, all the instruments, all the major works, etc...then you are applying the hacker philosophy to music. Or if you learn everything there is to know about automobiles, you're applying it to autos. If you are obsessed with economics and learn everything there is to know about how economies work, you're basically applying it to economics as well. hacking is about figuring out how things work.
Script kiddies are just people who download software that had already been written by others and use these tools to perform malicious activities. But a script kiddie has no real knowledge of how to actually program or how things actually work. The really dangerous "hacker" is the kind who knows in-depth all about the technology, and has no qualms about doing bad things.