Damned Souls was created in 1991.

In Canto 3 of Dante's Inferno, the souls being punished are the neutrals. These individuals neither sided with good nor evil during their lives, so they are condemned to chase after a banner while being stung by wasps and maggots for eternity.

Hell is a state of eternal punishment originally formed by or for the fallen angels. It will become a "place" at the final judgment as the damned souls in hell will receive their bodies back, but for now everybody in it is entirely spiritual: the fallen angels, and the souls of the damned. As they have no bodies, hell just defines a state of separation from God and eternal, unending suffering. But, as it said, it will be a place at the end of time when the damned receive their bodies back. But as it really isn't a place right now, it can hardly be above us, although the Bible speaks of it as being "below."

the purpose of the underworld is were all dead souls go, and evil people's souls are punished.

Neither, then nor; eg neither Jack nor John can ski.