I guess this applies more to children’s perceptions of it, and adults’ perceptions of children’s use. When I was a kid, it was considered a “bad word,” even if you were using it as a proper place noun. Would kids in Thomas Jefferson’s time, for example, be admonished for using it?
Yes. You will sometimes see the exclamation written as “H—!” in 18th and 19th century literature. “The Devil!” was also considered a cuss word.
The use of the word “hell” as an expetive is likely a matter of contraction; it is a condensed way of saying “go to hell”, or “to hell with it”.
As for children thinking that the word in and of itself is taboo, regardless of context, this is merely an instance of the way children sometimes think. I worked in an after-school program for children ranging in age from 4 to 10. Some of the older kids developed a fascination with accusing one another of being “gay” when they were arguing. I announced to the group that anyone who did that in the future would get a “time out”.
This solved the problem, but created a new one. Some of the very young children thereafter thought that the word “gay” was, in and of itself, “naughty”.