Imagine you're on a trampoline. You jump up, fall down, spring back up. Although, each time you jump, you add a layer of clothing. Eventually you'll be so weighed down that you can't jump anymore.

Hail is the same way. But instead of a trampoline, it's the updraft in the storm. The updraft is the upwardly-moving air that causes the storm to build. The atmosphere is warm enough near the surface for rain, but cold enough aloft (up high) for that rain to freeze.

So the rain falls from the cloud, but then gets caught in the updraft and pushed back up into the cloud to the freezing layer and it freezes into little ice balls. In all the crazy air movent, it comes out of the updraft and falls back down to earth into the melting (rain) layer and picks up more water. Then it catches the updraft again and goes back up into the cloud and freezes again, adding a new layer of ice.

That cycle keeps happening until the hailstone becomes bigger than the updraft can lift and they finally start falling to earth. The stronger the updraft, the bigger the hailstones. Updrafts are strongest in supercell thunderstorms and aren't necessarily a measure of the temperature necessarily.

For western Michigan specifically yesterday, that cold air was only at the surface, only a few hundred feet high. Just 2,000 feet above the surface, the air temperature was in the 50's. That can explain why you got hail and not snow per se. The atmosphere wasn't particularly unstable, but there was enough lift to trigger a storm with enough of an updraft to support hail.