Eventually, sound will work similarly to light in that it will sort of propagate block to block.
So, yeah, if you are in a closed stone room then you won't hear the sound through the wall. It won't be 100% realistic but it should provide some more interesting experience than hearing zombie moans through the walls.
Smell will work similarly.
I wish we could thumbs up posts because of you. xD
Anywho, again, I can't help but be impressed by how much you want to flesh out things that certain other... multimillion dollar companies that shant be named... neglect to do. The culmination of your plans will be a grand one, if nothing else.