"Hades" wouldn't be in the original Old Testament, but it is in the New Testament. As you noted, it's basically how "Sheol" was translated into Greek. So in the New Testament, they continued using "Hades". That's my understanding, anyway.
It seems like Sheol was considered to be underground, though, since it referred to the grave.
https://en.wikipedia.org/wiki/Sheol#Judaism
Again, though, this is just my understanding. I'm not a biblical scholar and I can't read Greek or Hebrew.
AFAIK, Hades isn't in the original text either; I do know it appears in Greek OT texts as a translation of the Hebrew Sheol (while the Hades of Greek mythology is literally an underworld, the Sheol of pre-Christian Jewish belief is, again AFAIK, not.)
> It seems like the "literally inside the Earth" interpretation is trending downward, which isn't surprising since biblical literalism in general seems to be declining.
The "literally inside the Earth" interpretation isn't particularly grounded in Biblical literalism (though the groups holding to those two beliefs may overlap significantly.)