I would recommend the article linked above, it does a very good job explaining the Orthodox position on the communion of saints. However, let me also try to briefly address your questions.
The Orthodox teach that, before Christ, things were as you are saying. All those who died entered Hades (Sheol, if you prefer...the Abode of the Dead) and were without hope of ever leaving. Then, Christ came and died, but Christ is Life and the Author of Life, and could not die. He shattered the gates of death (of Hades/Sheol) and saves those who trust in Him from it. The righteous departed, whom we call "saints", those people who lived before Christ and after Him, those who are both known to us that we call saints and those who are known only to God, are united to Christ, as St. Paul says:
"It is no longer I who live but Christ lives in me." (Galatians 2:20)
If Christ lives in us, how can we die? Jesus Himself says:
"I am the resurrection and the life. He who believes in Me, though he may die, he shall live. And whoever lives and believes in Me shall never die." (John 11:25-26)
We're told that, even though we die, we shall live...and even that we will never
die, if we live and believe in Christ. But, how can that be, since everyone dies? Does that mean no one is living and believing in Christ? Of course not! Christ here is talking about dying spiritually. Our bodies die, and we all wait for our bodies to be resurrected at the last day, but we never truly die if we live in Christ. This is how the saints are alive, and we can pray to them and with them...because they are alive in Christ.
Jesus even promises the thief on the cross that he will live with Christ, "Today you will be with me in Paradise." (Luke 23:43) No one really questions that, of course, Christ is speaking of heaven. He doesn't tell the thief (who the Church knows as St. Dismas) that he will be with Christ "in the last day" or "after the resurrection", but "today." The saints, like St. Dismis, live today with Christ in heaven...while they await for the fullness
of the Kingdom of God, when they will be resurrected in their bodies.
I hope this helps you, Walter. I'm glad to see you asking so many questions.