Is the aforementioned Hadith, which speaks of the dead knowing the news of the living, a proof in this matter, or do the people of knowledge have another opinion regarding it?

The Hadith about which the questioner inquired is narrated from Abu Ayyub al-Ansari, both as Marfu’ (attributed to the Prophet) and Mawquf (stopped at the Companion), but it is not authentic as Marfu’; it is only authentic as Mawquf. A similar narration has also been reported from Abu Hurayrah, both as Marfu’ and Mawquf.

A group of scholars has concluded that the souls of believers meet in the heavens and inquire from one another about the affairs of the people of this world. They also hold that the deeds of the living are presented to their deceased relatives who were righteous, so they rejoice at good deeds and are saddened by bad ones, and they inquire about the circumstances of those who died after them.