1. Is this the afterlife for the deceased?
2. If it is, where does Kai go after he blows up?
3. Where is Tai Lung from the first movie?
4. If Oogway says he can back to the mortal world even though he never has, does that mean he’s not dead?
5. Shouldn’t the afterlives in this mythology be like Heaven and Hell?
6. If the spirit realm is the afterlife and Kai dies in there, where would he go?
Interesting questions. I'll take a stab, but this is by no means the official answers.
1. Seems to be.
2. I think he's been obliterated.
3. Good question! He's listed as one of the residents of the Spirit Realm in the wiki http://kungfupanda.wikia.com/wiki/Spirit_Realm
4. No, I'm pretty sure that Oogway is dead, but that he is not claiming to have all the answers for how the Spirit Realm works.
5. Short answer: No. Longer answer: Heaven and Hell are Greek ideas that were adopted by early Christians. No reason that should be incorporated into a fantasy story involving Chinese culture.
6. I think he would cease to exist as Kai and would become part of the greater make up of all things. At least that's my theory.