First and foremost, it has to be understood that Hel has nothing to do with the Christian concept of hell. It is not a place of punishment but simply a place where people, Gods and maybe other beings go after their death. The picture the Norse sources draw of the afterlife is surprisingly fuzzy but there are several hints that everyone who died went to Hel, even warriors that died on the battlefield. Maybe some people would move on from there to other realms and maybe the idea of the possibility to go to any other realm after death aside from Hel only developed later on, we simply do not know.
What we do know is that the majority of the dead was thought to go to Hel and to stay there. In order to get to Hel, the dead have to walk the hel-way, a road that is mentioned several times as leading from the realms of the living to the realm of the dead. Before arriving at their destination, they need to cross a bridge that spans over the river Gjöll, which is interesting as crossing a body of water in order to reach the realm of the dead is an idea that shows up in many Myths all around the world. Once they have crossed the bridge, they arrive at the massive hel-gate that is guarded by a large dog whose chest is covered in blood. It is difficult to say which aspects of this description were added by the Christian authors or editors of these sources in order to make Hel appear scarier than it was thought to be in pagan times. Fact is that after travelling the hel-road, passing the blood-covered dog and passing through the menacing gate, the dead find themselves in a place that wasn’t scary at all.
Gylfaginning 34 tells us: “She (Hel) has great possessions there; her walls are exceeding high and her gates great.” Yet if we look at the ON original then we see that the word translated as “possessions” is actually “bólstaði” which simply means “farmsteads” or as Dr. Jackson Crawford translates it: “homes and farms”. Farms need sunlight and seminal ground in order to render any yield and Hel’s inhabitants can’t be purely spiritual beings if they still can ingest food. In the story of Baldr’s tragic death we also see that Hel has actually prepared a feast in order to welcome the new arrival in her realm. The tables are already set, the benches strewn with jewelry, mead has been brewed and covered with a shield. Mead is made from honey, so there have to flowers and other blossoming plants as well as bees living in Hel and the fact that the mead has to be covered shows us that there must be other insects whirring around as well.
So it seems that Hel is very similar to Midgard in many regards. There were homes and farms that have to be worked, mead that has to be brewed and there are feasts to be celebrated when a high-ranking new resident arrives. This is not a place of punishment, not even a place of penance but a place where life goes on. Since Ancestor worship was one of the most central aspects of the Norse religious practice there must have been a way for the dead Ancestors residing in Hel’s kingdom to observe or at least in some way interact with their descendants that were still living in Midgard. Unfortunately, the sources keep quiet in that regard. It is possible, that this contact had to be established from the other side, from the world of the living, and that it was easier to do so at certain times. We know for example that during the 12 days of Yule the layer between the world of the living and the world of the dead was thought to be very thin and maybe there were other specific days or time periods when people believed it was relatively easy to come into contact with the dead.
At last it has to be said that it is unclear if Hel was truly the end of the line. There are some sources that hint at an idea of reincarnation, which would make sense since the Norse system is still very closely connected to nature where all things are cyclical. This is only speculation though, as there are not enough sources to conclusively confirm that notion.