That's right. I've seen villagers actually die in all three games. In each case they simply disappear and a skeleton appears in a different spot.

I don't know a way of forcing the villagers in VV3 to "honor the dead". When one decides to do it spontaneously it's a long walk right across the map from the flowers to the gravestones, plus whatever time they spend walking from wherever they were to the flowers. Often it seems to be the elderly villagers, so the walk takes a long while. Not surprising though, as they are probably remembering their departed friends and family.