After watching episode 25 of Hell Girl and episode 5 of Hell Girl season 4 here's what I think happened to the villagers after they were killed by Ai and Michiru.
After burying Ai and her parents to the mountain god the villagers felt for sure the village would be saved from the famine they suffered for six years. But they were wrong. While everyone slept that night Ai broke out of her grave; she couldn't forgive the villagers for what they did to her and her parents and wanted revenge.
As soon Ai broke out of her grave she started setting the village on fire. The villagers woke up to the heat of the fire and started screaming in pain. Everyone tried to get out of their houses but the fire prevented them. Ai wasn't going to let anyone of the villagers off that easily. As Ai walked around the village, the villagers screamed because of the pain of the fire shouting 'help!', 'I'm burning!' and 'no!' It wasn't long till everyone in the village was dead.
After they died those who were only babies and very young children went to heaven because they were innocent of the crime the adults committed. All the adults and the ones who bullied Ai were to face a trial to see who were going to heaven or hell.
Grim reapers spoke to the villagers of their crimes of burying seven year old girls alive. Of course the village elder protested they did nothing wrong because it was what the mountain god wanted. But the grim reapers pointed out to him the mountain god never wanted that and he had been upset and angry with the villagers for doing that. The villagers were shocked from hearing that. Next the grim reapers spoke about Ai and her family. The bullies pointed out about Ai being an evil spirit and she deserved to die; they didn't want to admit their wrongs. So then the bullies would be sent to hell for their cruelty. The villager who beat Ai and her parents to death with a spade was to be sent to hell too. The other villagers didn't give in to their wrongs either so they were to be sent to hell too.
Sentarou's father begged to not have Sentarou be sent to hell; as Sentarou was pressured by the other villagers to help bury Ai, the father proclaimed Sentarou was innocent and that he should be the one to be punished because he pressured Sentarou too. The grim reapers knew exactly of what happened so Sentarou would be sent to heaven when he died as the guilt he was to hold for the rest of his life would be his punishment. As for Sentarou's father he would wonder around as a lost soul outside of hell until Sentarou dies. Sentarou's father accepted the punishment.
So in the end those who were only babies and very young children were sent to heaven. But those who were cruel and mean to Ai and her parents were sent to hell for their crimes.
As Michiru and her parents were dying in the burning building, the villagers felt no remorse for their crime because they all believed Michiru killed the landlord's son Eisaku and his two friends. Of course Michiru had nothing to do with their deaths but the villagers didn't believe her. It was then a stream of fire came out of the building and burned the villagers. This was because Michiru felt hatred and rage towards the villagers for what they did, so she was getting revenge by killing the villagers and destroying her village with fire. The villagers screamed in pain while they all died by the fire.
Those who had nothing to do with Michiru and her parents deaths went into heaven at once, but those who caused their deaths were put through a trial. The grim reapers spoke to them about their crime of murdering Michiru and her parents. Of course Eisaku's parents told them Michiru deserved to die because she killed Eisaku and his two friends. The two boys parents agreed with her. But the grim reaper should them a vision of Eisaku and his two friends bulling Michiru and trying to drown her and how the boys really died. Then the grim reaper said Michiru had been innocent all the time.
The villagers couldn't believe what they saw especially of what the boys did. Of course Eisaku's parents didn't want to believe they son could do something so mean. They were mean themselves and would never admit that. So they were to be sent to hell where Eisaku and his friends were; they were in hell for trying to kill Michiru. The other villagers tried to apologize for their mistake, but it was too late. As they blundered Michiru's father to death with a big piece of wood, and set the fire to kill Michiru and her mother they were also sent to hell for their murderous crime.
I don't know how the going into heaven or hell thing works but I'm sure you go through trials of what you've done in your life before you go to heaven or hell after you die. There's no doubt that those who were only babies and very young children at the time of Ai's death went to heaven because they weren't involved in her murder. I'm also sure only the villagers who murdered Michiru and her parents were sent to hell while the others didn't. No doubt to me that Eisaku and his friends went to hell because of their bullying.