It is possible that the paradise dimension witnessed at the end credits may be an area of The Overthere, though what Nastasia says seems to suggest otherwise. It is implied that the dead villains are condemned to an area below The Underwhere, where Bonechill was also imprisoned before he escaped. The areas of The Underwhere or The Overthere where Jaydes sends the dead people are never clearly shown all that are seen in The Underwhere are Shaydes that have not yet requested an audience with Jaydes, and D-Men who work for her, while all that are seen in The Overthere are Nimbis (and Skellobits that are invading). That said, all the conversations in The Underwhere seem to suggest that Shaydes can request an audience with Queen Jaydes, who will weigh in their sins and send them to The Overthere, submit them to punishments befitting of their crimes, or even return them to the land of the playing if the situation calls it. The Overthere resembles Heaven, surrounded by clouds, the sun, and rainbows. Also, many Shaydes can be seen discussing how they got a Game Over. Mario, Luigi, and Bowser end up in The Underwhere, which resembles Hell, where some Shaydes ask Mario how his "game," referring to his life, was. In that game, Dimentio sends Mario and his teammates to "the next world," albeit "while still very much alive," which is similar to the philosophy of the afterlife. In Super Paper Mario, a Game Over is the equivalent of death, as extra lives make "death" a mild inconvenience. Do you take Bowser to be your lawfully wedded husband 'til your game be over?” - Count Bleck, Super Paper Mario
U / New Super Luigi U / New Super Mario Bros.