Falwell has been a voice of racism, sexism, homophobia, and imperialism for decades. He opposed integration in the late 1950s and early 1960s (something the mainstream media has yet to mention in their recaps of his life). He founded the so-called "Moral Majority" in the late 1970s to counteract the feminist and gay rights movements. Falwell was also instrumental in mobilizing right-wing Christians to bring the Reagan Administration to power. As is well known, the Reagan Administration oversaw a variety of immoral policies, such as funding right-wing regimes and terrorists in Latin America, reversing the gains of the Civil Rights Movement, criminal indifference to the AIDS crisis, undoing the social safety net, and the list goes on.
The idolatrous theology he espoused was one of American dominionism, rooted in the idea that the United States is some kind of "chosen nation," which was ordained by God to rule the world. In his mind, as God's chosen nation, the United States had a responsibility to be ruled by fundamentalist Christian principles.
I won't say where Falwell's spirit is now; that's for God to decide. What will certainly live on for us in the here and now is his spirit of right-wing bigotry.