The Afterlife is can be considered part of the Otherworld. It is a somewhat nebulous place and little understood by most on Earth, but it may be generally defined as that realm where, after mortal death, people choose to go or where their souls feel they deserve to go. Genuinely terrible people usually experience some kind of torment, but that's because they're tormenting themselves. Most who have moved on just go somewhere that is suited to them, because like attracts like in terms of spiritual ether and so forth. Some may choose to be reincarnated on Earth, or they may be led to this result because they have much their soul must still learn before moving on.
Many people become tourists essentially, and still others who become other things (like demons, sometimes) but they don't usually come back to the human world for a very long time, because time isn't the same in other dimensions and planes of existence.
Hell
Hell dimensions do exist, but they're generally just nuts and very hard to endure without training and tremendous willpower. They're crafted to just...make someone torment themselves through introspection. The people who do worst there are the people who fear facing themselves and being alone with their own thoughts and guilt over what they've done.