“in death no one remembers you.” This is one of the many clear verses that teaches that dead people are fully dead; they are not alive in any form or fashion. The orthodox Christian belief is that the dead are not really dead because the person’s “soul” (or “spirit”) goes on living. But that belief did not come from the Bible, it came from the Greek belief in the immortality of the soul. There is no “immortal soul” in the Bible. When a person dies they are dead in every way and awaiting the resurrection of their body and the Judgment.
In this context, “remember” is literal, no one who is dead has any knowledge, and thus no memory of God or anything else. However, in this context, “remember” also has the idiomatic meaning of “remembering” in the sense of blessing, praising, or remembering God in meaningful ways (see commentary on Gen. 8:1, “remember”).
Another thing we learn from this psalm and the Hebrew parallelism it employs, where the first and second lines in Hebrew poetry often state the same truth in different ways, is that Sheol, which refers to the state of being dead, is like death itself in that no one is alive in Sheol. That is why no one in Sheol, in the state of death, can praise God.
[For more on dead people being fully dead, see Appendix 4, “The Dead are Dead.”]