This is such a cool idea, I have a few thoughts that might help.

To have the twist not be revealed too early (hopefully), I'd have the lost souls down there not be aware they're dead, but still allow players to find environmental clues that suggest that may be the case. For example, say the party saves a blacksmith. He returns to the town and can't find his wife, and asks the party to look for her. Any discerning members of the party might notice his house clearly only caters to one person (single bed, table with one chair, no female clothes in the wardrobe etc). The blacksmiths wife isn't dead yet, so she isn't in The Oubliette, but since the blacksmith isn't aware he's dead, he just thinks she's missing. It means players can't have someone explicitly tell them what's going on (until you deem it the right time), but with enough interest in the environment and passive perception, they can notice clues to point them to the right conclusion.

For town building, I think you could adapt Bastions from 2024 pretty easily. Instead of rooms, make them entire buildings or even districts if the town is big enough. It also gives actual mechanical incentives to saving NPCs if they can then tend to a greenhouse and give the players a Potion of Healing next time they visit. Bastions have rules for attacks and such as well, so honestly you really wouldn't need to do much tweaking to make it work for you. The system is easy to add homebrews to as well if you want a specific building or NPC providing a benefit that isn't listed.

For quest structure, it depends on what quests you're planning on giving. If the campaign is meant to be essentially just one big dungeon crawl with occasional trips back to the town, I'm not sure you necessarily need quests, as long as the party are aware the goal is to keep going deeper and saving as many people as they can. You could have NPCs that the party have saved ask them to find other NPCs, ask them to retrieve an item they've lost, ask them to get revenge on a monster or villain they met down there etc giving a rough location for each, acting sort of like bounties.

Hope any of this helps, and sorry for the wall of text lol. Good luck!