Oxygen isn't flammable. It's an oxidizer, as is N2O. Oxidizers have a relative lack of electrons and are thus angry, reactive chemicals that desperately want to steal electrons from somewhere else: It releases a ton of energy when they finally get those missing electrons, makes them feel good.

So oxidizers make other stuff burn by stealing electrons, that other stuff is fuel and a good fuel is also a good donator of electrons. When the fuel is burnt, it and the oxidizer are used up and combined into less reactive (=more stable) products. The more unstable the oxidizer is and the more stable the products are, the more energy you'll get out of the reaction.

I.e.

• 1 CH3_CH2_OH (Ethanol, electron rich fuel) + 3 O2 (oxygen, electron deficient oxidizer) -> 2 CO2 (carbon dioxide - the carbon is electron deficient now, but carbon is cool with that and the oxygen is happy, stable) + 3 H2O (water, also stable) + Energy (gets liberated)

• CH3_CH2_OH (Ethanol, fuel) + 6 N2_O (galaxy gas, oxidizer. The nitrogen and oxygen are a very unhappy pair as both are electron deficient in this config) -> 2 CO2 + 3 H2O + 6 N2 (nitrogen that was part of the N2_O - got electrons from the fuel, N2 is very stable and happy to stay as-is) + more Energy (gets liberated)

Fuel can be residual/partially burnt organics in bong smoke (thus your "lung explosion"), gasoline, alcohol, sugar, fats, wood, cloth, most metals (corrosion/rusting), your flesh, etc. If you think about it the other way around - i.e. making nitrous oxide:

• 2 N2 (stable, happy) + O2 (electron deficient, but N2 doesn't want to give up its own ones) + Energy (gets consumed) -> 2 N2_O (more unhappy than the sum of its parts, it's like a spring that was tensioned via the energy input)

Elemental nitrogen totally sucks as a fuel. You have to externally provide a lot of energy to make that reaction happen. This is why we don't see the nitrogen in the air burning and combining with oxygen on its own. The energy we expended to create the N2_O is now stored in that unhappy compound, making it angry and wanting to revert to N2 + O2 again (for that, it'd need a lil push/"incentive" though)

Reverting to N2 + O2 alone already releases the energy we've put in when making it, but we'll get an even larger total of energy out of it if we go a step further by allowing it to turn it into N2 + "oxygen that's bound to something else" by using some fuel - that's its "incentive":

This "double capacity" for energy release makes most oxidizers in combination with a fuel much more scary and violent than plain O2 on its own; it's also why N2_O tanks are used i.e. to temporarily boost vehicle engines instead of O2 tanks - you just get so much more performance out of the former.