Australia captain Michael Clarke and the rest of the test squad were joined by former and current players from around the world, and friends and relatives from Hughes' hometown of 2,500 people on the northern coast of New South Wales state, 575 kilometres (350 miles north of Sydney).
Clarke was a pallbearer and spoke at the funeral service held at the Macksville Recreation Centre and which opened to the song "Forever Young" by Youth Group.
The service closed with Elton John's "Don't Let the Sun Go Down on Me," the same song the famous entertainer and avid cricket fan performed at a concert last weekend in Germany in tribute to Hughes.
Hughes died last Thursday, aged 25, after being hit near the ear by a ball during a match between South Australia and his former state side New South Wales at the Sydney Cricket Ground. His 26th birthday would have been Sunday.
In steaming temperatures of nearly 30 Celsius (85F) early arrivals to the service, including Australian Prime Minister Tony Abbott, fanned themselves with papers. Most of those who wore sports jackets and blazers had taken them off, some with sleeves of their white shirts rolled up to their elbows.
At the front of the hall, near the altar for the Roman Catholic service, was Hughes' oak brown casket. Flowers and cricket bats, one with his test cap on the handle, were nearby.
Leading the service, which included a video tribute, Father Michael Alcock remembered the batsman as a "shining light."
"In his short time he walked as a child of the light, not in an ostentatious way but in a natural, unassuming and passionate way," the priest said.
Jason Hughes, Phillip's older brother, said his sibling was "destined to be a rock star."
"I couldn't have asked for a better little brother," Hughes said as his parents Greg and Virginia wept in the front row of the congregation.
Clarke, who has described Hughes as the brother he never had, broke down frequently last weekend at the SCG when he first commented on his close friend's death.
On Wednesday, he took several deep breaths before he began his remarks at the funeral, saying Hughes would "definitely call me a sook right now."
"I don't know about you, but I keep looking for him," Clarke said. "I want to see his face pop up around the corner.
After Clarke and the other pallbearers placed Hughes' casket in the hearse for a procession through the town, he put his hands on his hips, later wiping tears from his eyes.
India's stand-in captain Virat Kohli, team director Ravi Shastri and former Australian wicketkeeper Adam Gilchrist walked down the aisle together, part of a large group following the casket out of the hall.
Sean Abbott, the 22-year-old who bowled the delivery which fatally injured Hughes, was at the funeral. He was consoled by members of Hughes' family, and Clarke earlier said Abbott should not be held responsible.
The family had asked for Hughes' hearse to go through the town's streets to give locals a chance to take part in the service. The kilometre-long procession ended in the centre of town, where the hearse took Hughes' coffin to a private service, and Australia's cricketers plus family and friends were to hold a wake.
The funeral was telecast live around Australia and on video screens at the Adelaide Oval, where the rescheduled first test with India will start next Tuesday, and the SCG, where a row of 63 bats were propped up against pickets, each with an inscription of a special moment of Hughes' career.
Owners of many shops and businesses shut down to attend the funeral, and schoolchildren were let out of their classes early Wednesday to watch or attend the service.
In Macksville, Hughes' cousin Nino Ramunno spoke at length about Hughes' youth in Macksville as a keen, budding cricketer. One, who, if he lost a toss to determine who bats at the beginning of a match, kept suggesting it would be a best of three, five, or seven, or longer, until he won it.
Ramunno ended his remarks with a saying he said he received from a family friend, in reference to Hughes: "He who lives in the hearts of so many, never dies."
AP Sports Writer Dennis Passa in Brisbane and AP photographer Rick Rycroft in Sydney contributed to this story.